Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — SCOTLAND

Glasgow

Mr. Galbraith: asked the Secretary of State for Scotland when he next intends to pay an official visit to Glasgow.

Mr. Teddy Taylor: asked the Secretary of State for Scotland when he next intends to pay an official visit to Glasgow.

The Secretary of State for Scotland (Mr. William Ross): I am frequently in Glasgow but have no immediate plans for an official visit.

Mr. Galbraith: That is most regrettable. Does not the Secretary of State recognise that he ought to pay a personal visit to Glasgow to see for himself the refuse which is lying about? Is he not aware that at this moment there are 50,000 tons of garbage lying about the place in Glasgow? What has he to say about the health hazard that that creates, and the possibility of rats, flies and other vermin? Does he not realise that the citizens of Glasgow are very worried about it all and are looking to him as the responsible Minister to do something about it?

Mr. Ross: I am not unaware of the situation in Glasgow. I have had informal contact on my visit to Glasgow with the people concerned, and my right hon. Friend the Secretary of State for Employment has had close and continual contacts. I shall continue to have those contacts, and I urge the hon. Gentleman not to exaggerate and not to

get into something of a hysteria about these things. It is a serious matter.
Representatives of the corporation met representatives of the strikers today and urged them to return to work. We ought all to echo the hope that they will. The men undertook to consider this at a meeting of the strike committee on Friday, with a view to consultation with their members over the weekend. Clearly, the situation is delicate, and I counsel hon. Members not to say anything which would make the reaching of such a settlement more difficult. The other matters which the hon. Gentleman raised are under consideration.

Dr. M. S. Miller: Will my right hon. Friend confirm that, in spite of the great inconvenience caused to the citizens of Glasgow, he is in constant contact with the health authorities and there is, in effect, no health hazard whatever at the moment? Will he agree also that the hon. Member for Glasgow, Hillhead (Mr. Galbraith) might apply his not inconsiderable ability to other subjects by which he could help the people of Scotland better than he can help them on this?

Mr. Ross: I think that we must be careful here. No cause is helped by exaggeration or panic statements. The Greater Glasgow Health Board has confirmed that the strike has not yet had any effect on public health, but what we have to bear in mind is the effect of the cumulative backlog of work and the time that clearance will take. These are the matters concerning me at the moment, and for that reason my hon. Friend the Minister of State is to go to Glasgow tomorrow to make a further assessment of the position and to discuss it with the corporation.

Mr. Teddy Taylor: Does not the Secretary of State realise that it is quite wrong for him to talk about exaggeration by my hon. Friend when he himself has not even been to see the situation? It there not a need to prepare contingency plans to have the rubbish cleared, and is it not an affront to the people of Glasgow and a gross dereliction of duty on his part and that of other Scottish Ministers that, when we have more Scottish Office


Ministers than we have ever had in Scottish history, it takes three weeks of parliamentary campaigning to get one of his junior Ministers to go to Scotland tomorrow?

Mr. Ross: The hon. Gentleman should appreciate that the Question asked when I would make an official visit to Glasgow. I was in Glasgow last weekend, I saw the situation, and I talked to people.

Mr. Teddy Taylor: At the Excelsior Hotel.

Mr. Ross: The hon. Gentleman should realise that no one stays in that place all the time. I assure him that the position has been and is constantly under review.

Road Works

Mr. Gray: asked the Secretary of State for Scotland what plans he has to ensure that there is no delay in road works and other infrastructure requirements in areas of Scotland affected by oil-related development.

The Minister of State, Scottish Office (Mr. Bruce Millan): Priority is given to finance for oil-related road and other infrastructure schemes, and extra assistance has been provided for local authorities in areas affected.

Mr. Gray: Is the hon. Gentleman aware that production targets for North Sea oil have already lagged behind? How much of this is due to lack of infrastructure in the oil-related areas? Does the hon. Gentleman realise that, because of the snail-like decision-making progress of his roads department, there are many important schemes, in my constituency in particular, which are being held up? What does he propose to do to speed them up?

Mr. Millan: If the hon. Gentleman will put down Questions about specific road schemes, I shall answer them. I do not accept his charges either about road schemes or generally. Under the Conservative Government there were considerable delays not only in road schemes but on the infrastructure generally. If the suggestion is that there were no delays, I remind hon. Members that the oil programme has certainly not been held up because of delays in the infrastructure under this Government.

Mr. Lambie: Is the Minister aware that the Clyde Estuary is an important area for oil-related developments? Why is the Secretary of State still refusing to give the go-ahead for a motorway connection between Hunterston, one of these centres, and the M8 or the M74, in spite of repeated promises by himself and his Conservative predecessor? When will he do something?

Mr. Millan: I do not accept my hon. Friend's charges. Oil-related developments get priority. There are constraints on the road programme generally, as there are on all other programmes of public expenditure.

Mr. Grimond: Since it is important to get on with this work during the coming summer, will the Minister say when the local authorities will be told finally what extra grants they will get, for instance, for schools, roads and housing?

Mr. Millan: I think that the schools figures are already out. There is absolutely no restraint on housing expenditure by local authorities, not only in oil-related areas but on any housing construction anywhere in Scotland.

Mr. Henderson: Does the Minister accept that lack of housing is the greatest deterrent to improving the pace of the oil programme? Does he further accept that there is a very serious need to house properly the people already living in those areas, let alone the additional housing which will be required? Are the Government about to make a statement about additional resources or ideas they may have in mind to improve the supply of housing, particularly in the North-East?

Mr. Millan: There is no constraint on housing development other than the constraints which arise through the physical difficulties of finding the men and materials. There is no constraint on numbers or finance by the Scottish Office. The SSHA is deeply involved in these matters in many areas, including the hon. Member's constituency. It is there specifically in that case, however, to provide for incoming workers in accordance with the economic expansion programme. The provision of housing for the existing population is basically a local authority responsibility. We have had excellent co-operation from the local authorities


and they are under no restraint from central Government.

Mr. Buchanan-Smith: If the Minister is so pleased with what his Government are doing to help in these oil-related areas, why has the school building programme been slashed? In the county of Kincardineshire it has been cut to 11,000 for the whole year.

Mr. Millan: There is no cut in the school building programme—

Mr. Buchanan-Smith: Yes, there is.

Mr. Millan: The hon. Member should listen to the answer. There is no cut in the provision of roofs over heads. In the oil-related areas, particularly where there is an expansion of population, school provision is being made simultaneously and correspondingly.

Potatoes

Sir John Gilmour: asked the Secretary of State for Scotland what has been the average price per ton for ware potatoes in Scottish markets for the 1974 crop; how this compares with the guaranteed prices; and if he is satisfied that Scottish potato growers are getting a fair return.

The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): The average price received by Scottish growers from the beginning of the season until mid-February is estimated to be £24·40 per ton or £2·40 above the guaranteed price of £22 per ton determined by the previous administration. I am satisfied that this Government's determination of a guaranteed price for 1975 of £28 per ton should provide growers with the necessary confidence.

Sir J. Gilmour: Is the Minister aware that recent estimates of the cost of loading dressed potatoes on to lorries in Scotland are between £29 and £30 a ton, and that the estimates for the crop which is to be planted this year are between £35 and £37 a ton? Both figures are well above this year's and next year's guarantee. Since imported potatoes are selling in my constituency at 10p a pound—which is £224 a ton—and housewives are paying that price, does he not agree that there is a good case for re-examining what the guaranteed price for potatoes

should be after this year's crop has been planted and a proper cost of the assessment has been made.

Mr. Brown: That question raises a whole host of different matters. I am aware of the Potato Marketing Board's view of what the figures should be, but the normal pattern is for prices to be lower to our own producers and to rise from March onwards. We are satisfied that this guaranteed price should give confidence to the industry, because there is no evidence that things were difficult last year in spite of rising costs and the lower guaranteed price fixed by the previous administration.

Brussels

Lord James Douglas-Hamilton: asked the Secretary of State for Scotland when he next intends to pay an official visit to Brussels.

Mr. William Ross: I have no immediate plans to make such a visit.

Lord James Douglas-Hamilton: Will the Secretary of State ensure that his Department gives adequate publicity to the tangible benefits for Scotland of EEC membership especially from such sources as the European Social Fund, the European Coal and Steel Community and, in the near future, the regional fund?

Mr. Ross: If I remember rightly, I answered a Question by the hon. Member on that subject in January.

Mr. Canavan: Will my right hon. Friend try to arrange a visit to Brussels before the EEC referendum? If he manages to get there, will he take the opportunity of studying first-hand the undemocratic and over-centralised nature of the EEC? Will he try to see that this over-centralisation and lack of democracy does not become a characteristic of the EEC referendum? Does he realise that many of us in Scottish constituencies would like the result to be announced constituency by constituency, so that we may know whether or not our attempts to get out of the Market are being backed by our constituencies.

Mr. Ross: I gather that my hon. Friend will have no trouble in making up his mind how he will vote. In view of the requests for me to visit Glasgow, Moray


and Nairn, Dumbarton, Fife, and other places, I do not see any possibility of an early visit to Brussels. I shall be able to make up my mind on the nature of that organisation, I think, without such a visit.

Mrs. Winifred Ewing: On the right hon. Gentleman's next visit to Brussels will he consider putting the EEC fisheries policy on his agenda? Will he bear in mind that inshore fishermen feel that their interests are not being looked after, and that they are demanding a 50-mile limit now?

Mr. Ross: I had expected to have to deal with that point on a later Question, in which the hon. Member invites me to visit her constituency. However, we are not unmindful of the points which have been put concerning fishery limits, and so forth. This matter concerns, first, not only the EEC but the Law of the Sea Conference. Certainly the EEC and its ideas on fishery limits represent a further complication, and we are watching the situation.

Mr. William Hamilton: Is my right hon. Friend aware that every Minister who is renegotiating the terms of membership is being increasingly satisfied that he is getting the terms we want and which were included in our manifesto? Has my right hon. Friend contacted Scottish industry, which provides the vast proportion of jobs in Scotland? It will tell him, as it told me in Glenrothes in Fife that if we get out of the Market there will be a massive increase in unemployment.

Mr. Ross: I do not think there is any doubt that the answer we get depends on to whom we direct the question.

Mr. David Steel: Is the Secretary of State planning to give Scotland a lead on the referendum?

Mr. Ross: I do not know what the hon. Member means by a lead. Is he asking whether I am going to express my own opinion? Once the renegotiations are completed and we come to the referendum I shall be as much entitled to my opinion as anyone else. How I express it is a matter for me.

Mr. Fairbairn: When he goes to Brussels, if he ever does, will the Secre-

tary of State notice that that over-centralised bureaucracy has fewer bureaucrats in the Commission for 250 million people's welfare than he has in the Scottish Office for 5 million people's welfare?

Eaglesham (Bypass)

Miss Harvie Anderson: asked the Secretary of State for Scotland when he expects to announce the commencement of work on the bypass of the village of Eaglesham.

Mr. Millan: Responsibility for initiating a scheme lies with Renfrew County Council, which has not put forward any proposals.

Miss Harvie Anderson: Does the hon. Gentleman realise the extent of the damage to structure and the environmental pollution which the people are enduring in this designated conservation area? Does he accept that until there is some co-operation with the Scottish Office about both the line of the road and the cost it is unlikely that the bypass can be brought forward, yet it seems to me and to all my constituents a matter of urgent priority?

Mr. Millan: The initiative lies with the county council, which has not put forward any proposal to us. It has introduced a certain number of interim measures, such as the 30 mph speed limit, school crossing patrols, and "no-waiting" restrictions. It has turned down a number of other proposals made by the residents.

Dairy Farming

Mr. Monro: asked the Secretary of State for Scotland if the return for dairy farmers proposed in the statement of 17th February covers the rise in costs over the past 12 months.

Mr. Hugh D. Brown: Yes, Sir. This is a very substantial award. It consolidates and improves on the settlement last October and I believe it will allow the recent rise in confidence to be sustained.

Mr. Monro: Has the Minister noted the substantial drop in the number of dairy cows in the last return? In view of the probable shortage of milk for consumption and manufacture in the


coming months, has he made an estimate of the increase during the summer? Will it also cover the allowances for additional costs?

Mr. Brown: I am not sure that I accept what the hon. Gentleman says. Production is up on last year. There is an allowance in the United Kingdom quota, as a whole, of 50 million additional gallons, and there is every sign of confidence in the industry. I cannot predict the yield from every cow, but the dairy industry is healthy, and I am sure that it will continue to be so.

Mr. Watt: If the Minister is so sure that confidence is returning to the dairy industry, can be say why dairy farmers are selling such large numbers of cows, and why there has been a downturn in the number of dairy heifers coming into the dairy herd in Scotland?

Mr. Brown: I can never understand why a lot of farmers do a whole lot of things. [Interruption.] The hon. Gentleman is getting beef mixed up with milk. I repeat that the dairy industry as a whole is very healthy and that there is a great deal of confidence—more than there was a year ago.

Mr. Corrie: If the industry is so healthy, why did 270 dairymen apply to come out of dairy and into beef in December?

Mr. Brown: That is a tribute to this Government. All the farmers are very shrewd at seeing where the best bargains are. What the hon. Gentleman is saying is that the beef sector is also a healthy part of agriculture.

Industrial Devolution

Mr. David Steel: asked the Secretary of State for Scotland if he will now hold talks with the Scottish Confederation of British Industry, the Scottish Trades Union Council and the Scottish Council (Development and Industry) to discuss industrial devolution.

Mr. William Ross: I and my colleagues have discussed industrial and devolution matters with these bodies on a number of occasions since we came into office. We shall continue to do so as necessary.
The Government's decisions to transfer to the Secretary of State powers to ad- 
minister selective financial assistance to industry, and to set up a Scottish Development Agency, represents a substantial devolution of responsibility for industry to Scotland.
I hope that industry itself will follow this lead and make the maximum effort to develop management and production capacity north of the border.

Mr. Steel: I am grateful for that reply. But the document containing proposals for discussion on the Scottish Development Agency, which the right hon. Gentleman circulated, is completely silent on the question whether this important agency will be under the control of the Scottish Assembly.

Mr. Ross: I hope that the House will see the Bill to set up the agency before Easter, and that we shall have the agency in operation before the end of the year. As we do not have a Scottish Assembly, it obviously cannot be responsible to an Assembly. It will be responsible to the Secretary of State.

Mr. Rifkind: Will the Secretary of State give an assurance that if the Government wish to ascertain the views of industry on devolution or any other matter in the future they will consult both sides of industry? Does he realise that the pilgrimage of half the Government to Glasgow Airport via Prestwick Airport last weekend might not have been quite such a propaganda flop if they had had firm proposals to make, and if they had not decided not even to consider interviewing and meeting the Scottish CBI and the Chambers of Commerce as well as the STUC?

Mr. Ross: The hon. Gentleman is out of date. We have already seen the Scottish CBI and the Scottish Council on the document mentioned by the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel). We had meetings with the Scottish Council at a working dinner on, I think, Friday evening, when there was a good exchange on most of these matters, including the very point raised in the Question.

Dr. Bray: Without wishing to see the principle of national rates of pay weakened, or to see Scottish workers paid less than workers in any other part of Britain, may I ask whether my right hon.


Friend is aware that there is a case for having the capacity to deal with some aspects of industrial relations within Scotland? Is he aware that the quality of our industrial relations problems urgently needs attention?

Mr. Ross: I do not think that anyone doubts that.

Mrs. Bain: Is the Secretary of State aware that recent estimates put the number of people on short time in Scotland as high as 80,000? How much of this is due to the branch factory syndrome, from which Scotland has suffered for so long? Does he agree that it is a strong argument for an indigenous base of industry in Scotland?

Mr. Ross: I do not necessarily accept the hon. Lady's figures. If she wishes to ask a question of that kind, requiring a detailed answer, I shall be grateful if she will put down a Question.

Mr. Buchan: While considering these matters, will my right hon. Friend keep in mind that there are two distinct approaches on industrial devolution, one concerning those matters which should be decentralised and devolved to Scotland and the other concerning those which can be solved only if we keep cross-border control? On behalf of 7,000 Chrysler workers, who expressed precisely that attitude in order to preserve their jobs—the hon. Member for Perth and East Perthshire (Mr. Crawford) said that he entirely agreed with what they said and with what I said—will my right hon. Friend keep in mind that we cannot bring industry and jobs to Scotland unless we have total cross-border control on those matters, affecting the macro-economy of Britain?

Mr. Ross: This is an important question for discussion and argument. When one starts on the basis of being concerned to maintain the economic integrity of the United Kingdom, one begins to draw lines in respect of what can be devolved and what cannot be. I look forward to these continuing arguments over the coming months.

Comprehensive Education (Coatbridge)

Mr. Dempsey: asked the Secretary of State for Scotland what applications he

has in hand for the provision of accommodation for comprehensive education in Coatbridge; and if he will make a statement.

The Under-Secretary of State for Scotland (Mr. Robert Hughes): Lanarkshire Education Authority's school building proposals for the next two years included projects to provide accommodation at St. Ambrose, Columba and St. Patrick's Roman Catholic High Schools. The authority's proposals as a whole greatly exceeded in value the amount of school building my right hon. Friend was able to authorise for these years; and it will now be for it to decide, with the agreement of Strathclyde Regional Council, which projects to include in the programme for 1975–76.

Mr. Dempsey: Is my right hon. Friend aware that Columba High School, which is dubbed one of Lanarkshire's slum schools, requires about £1½ million for the provision of roofs and to replace an annexe, and that Coatbridge High School and St. Patrick's High School require £1·3 million—all at 1974 prices? In other words, over £3 million is required, but the county council is satisfied that it will not be able to afford one penny for those improvements for the next two years. Will my right hon. Friend visit Lanarkshire and discuss this serious situation? Will he give us an assurance that resources will be made available to eliminate these slums from the town of Coatbridge?

Mr. Hughes: My hon. Friend should be aware that Lanarkshire has been allocated £6,424,000 for 1975–76 for new starts. The priority given to school building is very much a matter for the local authorities to decide and to agree on amongst themselves. As regards visiting Lanarkshire, I understand that Lanarkshire is visiting me first to discuss this and other matters.

Mr. Dempsey: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply I wish to give notice that I shall attempt to raise the matter on an early Adjournment debate.

Lanarkshire

Mr. Crawford: asked the Secretary of State for Scotland when he next proposes to pay an official visit to Lanarkshire.

Mr. William Ross: I have no immediate plans for such a visit.

Mr. Crawford: Is the Secretary of State aware that that answer will not be regarded with much joy by the steelworkers in Lanarkshire? Before the right hon. Gentleman comes to Lanarkshire will he persuade his Cabinet colleagues to reconsider the decision not to set up a Scottish Steel Corporation? Will he establish such a corporation, so that the number of jobs available for steelworkers in Lanarkshire can be expanded? Further, in the context of the southern part of the county, will he persuade his Cabinet colleagues to reconsider the decision not to keep the fuel subsidy for tomato growing, so that the 2,000 people employed in that industry are not thrown on the same unemployment scrapheap as are thousands of steelworkers in the same county?

Mr. Ross: Steel and tomatoes together. May I suggest that the hon. Gentleman addresses his remarks on tomato growers to the appropriate Minister? He will then receive a clear answer.

Hon. Members: The Scottish Office.

Mr. Ross: Exactly. If the hon. Gentleman puts such a Question on the Order Paper it will be answered by the Scottish Office. I do not agree with the policies and plans that the hon. Gentleman's party has put forward for steel. I assure him that I had the opportunity, as did my hon. Friend the Minister of State, of a discussion with steelworkers from Lanarkshire. The hon. Gentleman will be disappointed to know that after the discussion someone actually moved a vote of thanks to the Scottish Office Ministers.

Mr. Teddy Taylor: If the Secretary of State has not the guts to visit Glasgow in the present situation, will he go to Lanarkshire and explain to the people there how he sat in the Cabinet and weakly agreed to the largest cut in the Scottish educational building programme in Scotland's history, from £69 million last year to £39 million this year, which will greatly add to Lanarkshire's acute educational problem?

Mr. Ross: The hon. Gentleman should appreciate that the amount being spent in the form of capital expenditure this year in respect of Scottish education is greater than it was last year, and greater

than it was the year before. When he talks about new starts, let him remember what his Government did. They postponed starts and pushed them forward a quarter, with the result that a quarter of last year's starts are going into the next year's starts. The hon. Gentleman has to put that into the balance as well. The hon. Gentleman can take no pride in what his Government did.

Dr. Bray: Is my right hon. Friend aware that the cuts in the school building programme in Lanarkshire are considerably smaller than the cuts being made in most of the education authorities in Scotland? Is he aware that at the same time the actual expenditure per head, under the discretion of the local authority, is lower in Lanarkshire than in most education authority areas? Further, is my right hon. Friend aware that the steelworkers in Scotland were well satisfied with the hearing that they were given last week?

Mr. Ross: I am aware of all those things.

Mr. Alexander Fletcher: Is the Secretary of State aware that the Lanarkshire building company of William Louden and Sons Limited has gone into liquidation? It is clear that in the past three years it donated £60,000 to the Labour Party. Will the right hon. Gentleman indicate whether that company and perhaps some others might still be solvent if they had not given financial support to the Labour Party? Further, will the right hon. Gentleman state the extent to which Labour Party funds in Scotland are dependent upon donations from big business?

Mr. Ross: I can assure the hon. Gentleman that his question was well worthy of himself. I should like to know exactly how much money was donated to the Tory Party by all the other firms that have gone bust as a result of the three-day working week, the hold-up of materials, and the escalation of prices that took place as a result of the confrontation last winter.

Post Office (Alterations in Addresses)

Mr. Fairbairn: asked the Secretary of State for Scotland what consultations he has had with officials of the Post


Office in Scotland with regard to suggested alterations in addresses.

Mr. Millan: Consultations about the use of the names of the new Scottish regions in postal addresses are still in progress.

Mr. Fairbairn: Is the Minister aware that the Post Office believes that the onus is on the public to say why there should not be a change from counties to regions in their addresses? Does the right hon. Gentleman agree that this measure, which the Post Office has already forced on areas in England, is unnecessary, unpopular and undemocratic?

Mr. Millan: I am afraid that the hon. and learned Gentleman is wrong. In fact, the Post Office is at this minute consulting the Post Office Users' Council for Scotland. Among other bodies it is also consulting the Scottish Council of the CBI, the Scottish Council (Development and Industry) and the new regional islands and district councils. It will consult anyone else, including even the hon. and learned Gentleman, if he cares to send the Post Office his views.

Mr. MacCormick: Is the hon. Gentleman aware of the intolerable suggestion that Argyll should be called West Strathclyde? Is he further aware that Argyll is the oldest area with a Gaelic name in Scotland? Will the Minister take a stronger line on this unparalleled attempt to rob us of our identity?

Mr. Millan: Strathclyde is also a very old name. No decisions on these matters have yet been reached. It is not strictly a matter for me, but I am happy to convey to the Post Office any representations that are made on these matters.

Mr. Alexander Wilson: If the hon. Member for Argyll (Mr. MacCormick) is so proud of his county, will my hon. Friend confirm that slogans in the county of Argyll saying "Go home you Sassenach, go home" are removed by the Scottish National Party?

Mr. Millan: As far as I know, it is not proposed by anyone that "Sassenach" should appear in any postal address.

Fishing Industry

Mr. Corrie: asked the Secretary of State for Scotland what recent representations he has had from the Scottish fishermen with regard to their financial problems.

Mr. Hugh D. Brown: The Scottish Trawlers' Federation and the Scottish inshore industry have pressed for aid to enable them to meet current operating difficulties. As the hon. Member will know, and be pleased about, we announced on 27th February our proposals to give the fishing industry assistance for a six-months' period. The order embodying these proposals will be laid before Parliament as soon as possible.

Mr. Corrie: I thank the Minister for that reply. Does he accept that by the time we have the 200-miles limit which is proposed by the Law of the Sea Conference there will be no fish left to fish? Should there not be a 50-miles limit round Scotland before the 200-miles limit is introduced? Does the hon. Gentleman agree that such a limit is particularly necessary for the herring industry, which is in danger of being completely wiped out by foreign boats this summer?

Mr. Brown: I wish Opposition hon. Members would give us a wee bit of credit. The Question concerns the financial problems of the industry. We estimate that over £2 million will be coming to Scottish industry. Is the hon. Gentleman now indicating that the official policy of one of the Opposition parties is a 50-miles limit? I think that that would be disastrous. We shall do our best—[Interruption.] Unfortunately, herring have a habit of breeding outside even the 50-miles limit. The sooner some members of the Scottish National Party get to know something about herring, rather than just looking for votes, the better. I repeat that we are concerned about the future of the fishing industry as a whole, including the herring industry, and that it will be very much to the fore at the Law of the Sea Conference next month.

Mr. Henderson: Does the hon. Gentleman accept that he may be chased by irate


housewives in Provan because they are unable to get fish to eat with their chips? He should perhaps take this matter a little more seriously. All fishing interests welcome the Government's recognition of the problems of the fishing industry by the granting of financial assistance, but is the hon. Gentleman aware that there is strong feeling that the assistance is heavily biased towards the large deep-water boats, and that boats of 40 ft and under have been excluded from the scheme, although their costs have also risen substantially? Will the hon. Gentleman undertake to review the matter to see whether assistance can be given to the small man as well as to big companies?

Mrs. Winifred Ewing: Hear, hear.

Mr. Brown: The hon. Lady should not say "Hear, hear" before she has heard the reply. I look forward to the day when a member of the Scottish National Party will congratulate the Government on doing something worth while. Surely I do not need to spell it out. It is obvious that the operating assistance is geared to giving the greatest amount to those who have the heaviest costs. The bigger the boat, the more expensive it is to run. Therefore, there is a graded system which we think is fair to all. I assure the hon. Gentleman that there will continue to be fish for the housewives of Provan and every other constituency, provided that we get the 200-miles limit, because the key to the problem is the conservation of the supply of fish.

Mr. Sproat: Does the Minister accept that the fishing industry is grateful for what was announced last Thursday. Does he also accept that severe problems remain? Is he aware that in Aberdeen the average price per hundredweight last month was down 18½ per cent. on last year? That is largely because of the distribution of foreign-caught frozen fish. What is needed is a temporary ban on the importation of fish from the non-EEC countries. Will the hon. Gentleman call an early meeting with the fishing industry to discuss its long-term stability?

Mr. Brown: That is a more constructive approach. We are aware of the difficulties which face the fishing industry because of the glut of fish in world markets. Scotland cannot be isolated from that, any more than any other

country can be isolated from it. I am always willing to discuss constructive proposals from any section of the fishing industry.

Scottish Trades Union Congress (Meeting)

Mr. Lambie: asked the Secretary of State for Scotland if he will make a statement on the meeting between members of the STUC and the Prime Minister and himself on 27th–28th February.

Mr. William Ross: Both parties to the meeting agreed that it provided a most valuable opportunity for wide-ranging discussion of matters vital to the Scottish economy. In recognition of its success, my right hon. Friend the Prime Minister has proposed that the meeting should be repeated at annual intervals.

Mr. Lambie: I welcome my right hon. Friend's reply, but is he aware that Lord Beswick appears to think that Hunterston is near the Arctic Circle? Following the talks, he stated that there was a shortage of houses and social amenities in the area. Did not my right hon. Friend inform the noble Lord that Hunterston was within nine miles of Irvine new town, which is building one of the most modern shopping centres in Western Europe and is committed to building houses for incoming steel workers? Is my right hon. Friend aware that the Cunninghame District Council, which is the local authority in that area, is committed to building houses for incoming steel workers? Will my right hon. Friend remind Lord Beswick that there are only two niggers in the woodpile, of which he is one, because he has prevented the construction of a motorway to improve the road system around Hunterston. The other is his right hon. Friend the Minister for Transport, who has allowed British Railways to lift up tracks one after another in this important development area, so making impossible the provision of adequate railway services. Will my right hon. Friend do something? We are fed up with saying this.

Mr. Ross: My hon. Friend should be careful what he says. I attended the Press conference at which Lord Beswick spoke. My hon. Friend has attributed words to Lord Beswick that were never uttered.

Mr. Lambie: The Glasgow Herald.

Mr. Ross: They were uttered by a journalist from the South. I asked him whether he thought that Hunterston was in a remote Highland area and made the point that my hon. Friend has just made.

Mr. Teddy Taylor: As unemployment must clearly have been on the agenda at this meeting, what indication did the Secretary of State give of when the unfortunate trend of unemployment in Scotland is likely to reverse and the figures to start coming down? As the visit was regarded by many people as a bit of a washout, what was its cost to the taxpayer?

Mr. Ross: I cannot answer the last part of the supplementary question without notice. If the hon. Gentleman had been at the meeting he would have heard that the discussion on employment was on a constructive basis and was concerned with what could be done. The STUC recognised that the rise in unemployment in recent months was not the Government's responsibility but resulted from past conditions and from the present world position. Understanding was expressed of the Government's policies. I hope that we shall be able to pass those policies through the House with the help of everyone concerned as quickly as possible, particularly the establishment of the Scottish Development Agency.

Mr. Robertson: Does my right hon. Friend accept that what was discussed in Glasgow last weekend is of vital importance to all of us? We should all like to have taken part in the discussion. Will he arrange for the matter to be debated in the House? Will my right hon. Friend ensure that he is not blinded by the promises from Hunterston and remember that retaining the finishing mills of DL and Clyde Alloy is of equal importance with looking after our steel making capacity?

Mr. Ross: I assure my hon. Friend that these matters were discussed and that everyone was aware of all the facets of the Hunterston development and the steel industry. I regret that my hon. Friend was not there, and I am sure he will be the first to appreciate that it was right for us to discuss these matters with the people who are responsible for industry and are familiar with the industrial situation. We also wish to see re-investment, real

growth and modernisation in the Scottish economy.

Mr. Gordon Wilson: Will the right hon. Gentleman confirm that the report in the Daily Record that the Scottish Assembly is intended to have some tax-raising power and control over trade and industry is correct?

Mr. Ross: The hon. Gentleman had better wait until we come to our final decision. What has been said and repeated is that the paper on devolution put forward by the STUC for discussion is one of the best we have seen, and certainly much better than the one put forward by the hon. Gentleman.

Geriatric Beds (Fife)

Mr. Adam Hunter: asked the Secretary of State for Scotland what plans he has for increasing the number of geriatric beds in the county of Fife; and if he will make a statement.

Mr. Robert Hughes: To meet the requirements of Fife for geriatric hospital beds, 268 additional beds will be required by 1981. Minor schemes under construction will provide 58 additional beds by next year. Major schemes which will provide the balance of 210 beds are at various stages of planning or design.

Mr. Hunter: Is my hon. Friend aware that the Fife Health Board, at the suggestion of the Department, has accepted a cut in the number of beds in phase 1 of the new hospital in Dunfermline district, which means that the number of geriatric beds will be reduced? I understand that my hon. Friend is to visit the Fife Health Board on 7th April. If that meeting takes place, will my hon. Friend discuss the subject of geriatric beds?

Mr. Hughes: My hon. Friend has rather sprung on me his supplementary question about the district hospital. There is no question of the provision of additional geriatric beds being prevented. I am afraid that other commitments preclude my making the visit which I had previously arranged. When I do visit Fife or go to see the health board I have no doubt that the matters my hon. Friend has raised with me will be taken into consideration.

Sir John Gilmour: As the proposal to use the former maternity hospital at Newport-on-Tay for the provision of geriatric beds has been turned down on grounds of cost, will the hon. Gentleman consider the provision of extra geriatric beds in the St. Andrews area, in place of Newport-on-Tay?

Mr. Hughes: I shall consider that.

Scottish Development Agency

Mr. William Hamilton: asked the Secretary of State for Scotland when he expects to finalise his consultations on the setting up of the Scottish Development Agency.

Mr. Millan: Around the middle of March.

Mr. Hamilton: Does my hon. Friend recognise that the principle of the agency has been widely welcomed throughout Scotland? Will he give an assurance that there will be adequate finance for it from oil and other resources in Scotland and from the United Kingdom budget? Is my right hon. Friend satisfied that the policy proposals which are likely to be enunciated by the development agency will be in no way in conflict with what happens within the EEC?

Mr. Millan: I do not think they will. The agency has not yet been established, and there is some way to go before we shall know the final results of the EEC renegotiations. On the financial matter, I can give the assurance that there will be adequate finance to do the important job we want the agency to do.

Mr. Russell Johnston: Will the hon. Gentleman answer the specific point made by the hon. Member for Fife, Central (Mr. Hamilton) who mentioned the question of oil? Is it the intention that any kind of assured share of oil revenue will be available to the agency? Will the Minister do a little speculation, which his right hon. Friend was reluctant to do, and say whether, when the Scottish Assembly is established, it is expected or hoped that the development agency will be responsible to it?

Mr. Millan: I have nothing to add to what my right hon. Friend said on the latter point. As for the financing of the agency, it has already been made

clear that this is not to be done by a specific allocation of oil revenue.

Grant-aided Schools

Mr. Sproat: asked the Secretary of State for Scotland what representations he has received regarding the freezing of grants to grant-aided schools.

Mr. William Ross: I have received between 50 and 60 letters.

Mr. Sproat: Have these 50 or 60 letters made the right hon. Gentleman aware that this vicious freeze is hitting hardest those least able to bear it, namely, the children of less well-off parents? Why does the right hon. Gentleman obstinately refuse to give to Scottish pupils the protection which his right hon. Friend is giving to English pupils? Will he now either restore the grant to its 1973 level, in real terms, or introduce a fee remission scheme on the same lines as that operating in England?

Mr. Ross: The hon. Gentleman should appreciate that the position in England is entirely different from that in Scotland. There has never been a fee remission scheme in Scotland, for the simple reason that there was not the same obligation upon these schools to accept children from local authority nominations. The hon. Gentleman should remember that this has long been the policy of this party and this Government. We instituted the policy when we were last in Government. It should therefore come as no surprise to him. This is not the time—during a period of financial stringency when we have complaints about the amount of money being made available for local authority schools—to increase the grants to this type of school.

Mr. Canavan: Will my right hon. Friend urge members of the Opposition to accept that it has always been one of the traditions of Scottish education that educational opportunity should be available to children irrespective of their parents' income and ability, or willingness to pay? Will he further tell the Opposition, especially the hon. Member for Aberdeen, South (Mr. Sproat), that at a time when there is a shortage of funds for education which particularly affects children who can only be labelled as underprivileged, to try to fight for money for fee-paying schools is nothing short of irresponsible stupidity?

Mr. Ross: This is a principle which is completely outside the Scottish system of education.

Mr. Rifkind: Does the right hon. Gentleman not realise that the Government's policy on grant-aided schools is causing serious damage to local authority schools in Edinburgh and elsewhere? Is he aware of the statement of the Labour chairman of the Lothian Education
Committee criticising the Government for their policy? In the interests of local authority and grant-aided schoolchildren will he consider giving help to the parents of those children presently at grant-aided schools?

Mr. Ross: The hon. Gentleman should be careful how he quotes people. I do not accept his general, sweeping statements. He should recognise that this policy has been in the forefront of our education policy for a long time. It should come as no surprise to him. The question how grant-aided schools will eventually be phased out will be a matter for consideration.

Mr. Galbraith: Will the Minister carefully review the position of the pupils who are now at school and whose parents, because of the freeze, cannot afford the new fees? Will he do something to help those pupils now?

Mr. Ross: I am prepared to look at anything, as the hon. Gentleman will appreciate. I am quite open to suggestions on this matter. It may be one of the things which we can look at when we examine the whole question of how and when to phase out.

PARAQUAT (FATAL ACCIDENT INQUIRY)

Mr. Fairbairn: asked the Lord Advocate if he will make a statement about his reasons for ordering a fatal accident inquiry in the Kirkcudbright paraquat case.

The Lord Advocate (Mr. Ronald King Murray): In terms of Section 3 of the Fatal Accidents and Sudden Deaths Inquiry (Scotland) Act 1906 I may, in any case of sudden or suspicious death in Scotland, whenever it appears to me to be expedient in the public interest, direct that a public inquiry into such death and

the circumstances thereof shall be held. In the case of the death of Ralph Harold Anders there was not evidence to warrant bringing criminal charges against anyone, but the death was suspicious as some of the evidence appeared to point away from accident or suicide. The death had attracted considerable public interest locally and there was much speculation and rumour. Moreover, solicitors acting for two brothers of the deceased specifically asked me to direct that an inquiry be held, as the brothers were concerned about how the deceased had met his death. In all these circumstances it seemed to me that the proper course was to direct that an inquiry be held under the 1906 Act.

Mr. Fairbairn: Does the Lord Advocate appreciate that this and other cases have caused widespread public concern in Scotland over the fact that in a fatal accident inquiry a jury should be invited to return a verdict of homicide against a named person or persons? Is he aware that if that were done such a person would either have had a public verdict of homicide returned against him without trial or, if he were charged, before trial? Does the Lord Advocate appreciate that this is in keeping with the bad procedures of the law of England and contrary to the good procedures and practice of the law of Scotland?

The Lord Advocate: The hon. and learned Gentleman has made a statement with which I do not agree, and I do not think that, on reflection, when he reads his supplementary question, he will agree with it himself. For reasons best known to himself the hon. and learned Gentleman does not follow the distinction drawn in the 1906 Act between fatal accident inquiries, on the one hand, where the emphasis is on accident, and sudden or suspicious death inquiries on the other hand. The Anders inquiry was a suspicious death public inquiry which Parliament specifically empowers the Lord Advocate to order. Where there is suspicion there is necessarily the possibility of subsequent criminal proceedings. The hon. and learned Gentleman would probably have been the first to complain had I not ordered such an inquiry into Mr. Anders' death.

Mr. Buchan: With respect, may I ask whether that is the basis for the anxiety?


Is not the basis for the anxiety the feeling among many of us that some of the evidence and statements made might have adversely prejudiced some people involved in the inquiry? Will my right hon. and learned Friend look at this again?

The Lord Advocate: The fatal accident raises an important point, which I have to consider. I assure my hon. Friend that matters of that kind are in my mind and that when the notes of evidence have been received—they have not yet been received—I shall study them with great care, bearing in mind the points he has made.

STIRLING

Mr. Canavan: asked the Lord Advocate what plans he has to make an official visit to Stirling.

The Lord Advocate: I do not intend to make an official visit to Stirling in the near future.

Mr. Canavan: Is my right hon. and learned Friend aware of the growing concern over the delay and apparent indecision of the Procurator Fiscal in Stirling in dealing with the objections laid concerning the election expenses of the Scottish National Party? Will he see that appropriate action is taken to ensure that the Scottish public knows exactly from where the Scottish National Party gets its election funds, even if it turns out that some of its sources are ordinary working-class Scots laddies like my constituent, Sir Hugh Fraser?

The Lord Advocate: I cannot associate myself with the remarks of my hon. Friend. I wrote to him on Monday informing him that a report from the Procurator Fiscal in Stirling relating to the matter he has in mind had been received by me at the end of the previous week. I can tell him now that a complaint has been served on a common law charge and the case will be called in court on 10th March. Accordingly the matter is sub-judice.

Mr. Henderson: Does the Lord Advocate agree that one way to resolve the problems of the hon. Member for West Stirlingshire (Mr. Canavan) would be for him to resign his seat and fight another

election? I doubt whether he would be returned to this House if he did.

FATAL ACCIDENTS (INQUIRY PROCEDURE)

Mr. Monro: asked the Lord Advocate if he is satisfied with the fatal accident inquiry procedure in Scotland.

The Lord Advocate: the fatal accident inquiry procedure has been in operation for many years and is generally satisfactory. There is, however, room for improvement, and the question of amendment of the relevant legislation is under active consideration.

Mr. Monro: I am grateful for that reply. Will the Lord Advocate bear in mind that there is obviously widespread concern in the House and in Scotland about the number of fatal accident inquiries we have had in the past 12 months? Is there not a possibility that, through a change in policy, the right hon. and learned Gentleman is introducing the coroner's court system of England into Scottish law?

The Lord Advocate: I can assure the hon. Gentleman that this is not the case and that there has been no change in policy in the Crown Office since I took the office of Lord Advocate a year ago.

Mr. Steel: Is the Lord Advocate considering, in his review, the question of legal aid for persons appearing before such a court?

The Lord Advocate: This is a matter I have taken into consideration. I do not yet have anything to say on the subject.

NORTON VILLIERS TRIUMPH LIMITED MOTION (BUSINESS STATEMENT)

Mr. Heseltine: On a point of order, Mr. Speaker. May I seek your guidance?
Yesterday, 4th March, the right hon. Gentleman the Leader of the House withdrew his original explanation why the Norton Villiers Triumph motion had featured in the Business Statement on Monday night, 3rd March. Originally the right hon. Gentleman told the House
It is because the Chairman of Norton Villiers Triumph had informed us today that


this money must be forthcoming this week, otherwise there will be redundancies. This is the first that the Government have heard of the urgency of the matter."—[Official Report, 4th March 1975; Vol. 887, c. 1227.]
Subsequently yesterday the right hon. Gentleman told the House:
I have now found that my right hon. Friend the Secretary of State for Industry met Mr. Poore, the Chairman of Norton Villiers Triumph Ltd., on Thursday of last week. My right hon. Friend telephoned me yesterday from Bristol, and said that this matter must be dealt with this week, otherwise there would be great difficulties in the firm. I pointed out to him the great inconvenience to the House in debating the matter this week. However, he insisted that the matter must be dealt with this week, otherwise there was a danger of redundancies. Therefore, I announced the matter last night."—[Official Report, 4th March 1975; Vol. 887, c. 1275–6.]
On 18th February and 24th February letters went to the Department of Industry in which the Government received final warning of the consequences for NVT of further delay in the NVT motion. In other words, the explanation given after the sitting was suspended yesterday is no more accurate than that which led to the trouble in the first place.
Further, the Secretary of State for Industry yesterday, in column 1272, told the House that he spoke to the Leader of the House late on Monday morning of this week. It follows that a Business Statement could have been made to the House at the normal time of 3.30 p.m.—unless the Government had already decided to guillotine the Finance Bill and that they would—regardless of progress made in Monday's debate—be making a Business Statement late on Monday evening.
My question to you, Mr. Speaker, is whether you will now guide me as to the appropriate manner in which the House can obtain a full and accurate explanation of this regrettable chain of events.

Mr. Speaker: This matter has been raised as a point of order. It is not a point of order. It is not a matter for the Chair. It is a matter for the right hon. Gentleman the Lord President of the Council whether he wishes to say something on this point today.
I must ask the House to support me on this issue. We are to have a debate on this subject later today when all these matters can then be raised. Furthermore, whether there is disclosure of certain

letters is again a matter for the Leader of the House and not for me. These are not matters which should be raised in the form of points of order. Recently the right hon. Gentleman the Leader of the Liberal Party asked in a point of order why the Lord President of the Council did not make a statement on a certain matter. Again, that has nothing to do with the Chair. These are false points of order. If the Lord President of the Council wishes to say something on this matter I shall not rule him out of order. However, I repeat that these are not matters for me.

The Lord President of the Council and Leader of the House of Comons (Mr. Edward Short): It is difficult to understand why the hon. Member for Henley (Mr. Heseltine) is making such a fuss about this matter. [HON. MEMBERS: "Oh."] The simple fact is that the firm needs money and needs it urgently. [Interruption.] Of course I knew about the guarantee to the bank. I put the motion on the Order Paper months ago and I have answered Questions on this topic in the House.
The hon. Gentleman referred to two letters. They are letters from my right hon. Friend the Secretary of State for Industry. I did not know about those letters. The first I heard about the extreme urgency of the situation was on Monday morning. Therefore, I made a Business Statement. Such a Business Statement is made either at the end of Business or at the beginning of Business. [HON. MEMBERS: "Oh."] The only error that occurred was when I said originally, in reply to the right hon. Member for Yeovil (Mr. Peyton), that yesterday—meaning Monday—was the first the Government had heard of the matter. It was the first that I had heard of the extreme urgency of the situation.
My last words to the House yesterday were words of apology. I am sorry that it occurred and I am sorry that it was done at the end of Business. But the fact remains that the firm needs money and it needs it this week, otherwise there will be redundancies. What is all the fuss about?

Mr. Speaker: We are getting to the stage whether or not the authority of the Chair is flouted by putting forward these matters as points


of order. These are points of argument which can be discussed later. This is a matter in which I must ask for the support of the House. I am not prepared to allow hon. Members to put points of argument as points of order.

TEXTILE INDUSTRY

Mr. Thorne: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration; namely,
the decision of the textile union to call a one-day national stoppage which stems from the contraction in the industry because of closures in the Lancashire textile mills.
I am somewhat hesitant, Mr. Speaker, to raise this matter as a point of urgency in view of yesterday's exchanges. Possibly, Sir, you will have seen the announcement on the "tape" earlier today that there is to be a one-day national strike of textile workers arising from the contraction in that industry as a result of which some 60,000 workers have been placed on short-time working and a further 2,500 workers have already lost their jobs this year.
I understand that in seeking to move the Adjournment of the House under Standing Order No. 9 I must establish that the matter is specific, important and urgent. The urgency of the matter is fairly clear from what I have already said. This matter involves the problem of employment and the effect which redundancies will have on families in the Lancashire area. That the matter is specific to the textile industry again is obvious from what I have said. Furthermore, it will also be obvious from what I have said that this matter is extremely important to those concerned, and indeed nationally.
I have already said that there is to be a national one-day stoppage. The workers have been forced to take this action and, therefore, there is a need for an immediate Government initiative to overcome the problem of rising unemployment in the textile industry in Lancashire. Against that background, Mr. Speaker, I request that I may move the Adjournment of the House in order that the matter may be considered.

Mr. Speaker: I am grateful to the hon. Member for Preston, South (Mr. Thorne) for having given me notice of this matter. He is seeking to obtain the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific and important matter that should have urgent consideration; namely,
the decision of the textile union to call a one-day national stoppage which stems from the contraction in the industry because of closures in the Lancashire textile mills.
I have great sympathy with the hon. Gentleman over the importance of this matter. My decision does not bear at all on the merits of his application but simply on whether I should disrupt the prearranged business of the House. I hope that other ways may be found for the hon. Gentleman to pursue the matter. I am sorry that I cannot allow him to do so under the Standing Order No. 9 procedure.

MR. ALAN GRIMSHAW (SELECT COMMITTEE'S REPORT)

Mr. Kelley: On a point of order, Mr. Speaker. I wish to ask for your judgment on a matter which came to my notice at the latest possible hour. It relates to the Committee of Privileges which on behalf of the House is concerning itself with the circumstances under which Mr. Alan Grimshaw had been suspended from his employment with the National Coal Board following evidence which he had given to the Select Committee on Nationalised Industries and from which there flowed a report. That report is available to the Press and has been so available for a number of hours today, but is not yet available in the Vote Office. I should like your ruling, Mr. Speaker.

Mr. Speaker: I shall investigate what the hon. Member for Don Valley (Mr. Kelley) said. I shall communicate with him or make a statement to the House on the point.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 21ST MARCH

Members successful in the Ballot were:

Mr. Michael Neubert.

Mr. Robin F. Cook.

Mr. Robert Cooke.

STATUTORY INSTRUMENTS

Ordered,
That the draft European Communities (Definition of Treaties) Order 1975 be referred to a Standing Committee on Statutory Instruments.—[Mr. Edward Short.]

PROTECTION OF MENTALLY RETARDED PERSONS (EVIDENCE)

3.40 p.m.

Mr. Christopher Price: I beg to move,
That leave be given to bring in a Bill to regulate the admissibility of statements in evidence of mentally retarded persons.
I should like to thank right hon. and hon. Members on both sides of the House for making a last minute change in the guillotine procedure to enable my Ten-Minute Bill to be taken today. I hope that all Ten-Minute Bills will be brought in in the same way when guillotines operate in future. I should also like to thank you, Mr. Speaker, for your help.
The object of the Bill is simple. It is to accord to someone, for example with a mental age of eight, both in interviews with the police and subsequently before the courts, that protection and consideration that a child with a chronological age of eight would normally be given, according to the rules by which we proceed.
The Bill's underlying message, which is not yet sufficiently understood and recognised by the public and the courts, is that it is unfair and leads to error to accord to many statements of the mentally retarded that degree of reliability which the courts properly and rigorously attach to those of the mentally normal. I know that judges at present have wide discretion as to admissibility in this area, but it is a discretion that they do not exercise with sufficient frequency. If one reads, say, "Cross on Evidence", one sees that it is a discretion which they exercise with less and less frequency as the years go by. At the least my Bill aims to ensure that they do so more often, since the absence of a statutory provision of this kind can lead the courts into seriously erroneous verdicts.
If the measure that I seek to introduce had been in force in 1950, Timothy Evans, for example, would be alive and free today. The same would have been true of Derek Bentley. These disturbing cases do not abate.
My interest in this matter stems from what was called the Confait case in 1972 in which an 18-year-old mentally retarded constituent of mine, Colin Lattimore, was convicted of murdering a homosexual


prostitute in Catford on the basis alone of his confession to the police. Since then, Britain's most eminent forensic pathologist, Donald Teare, has pronounced Lattimore's confession to be wholly irreconcilable with the agreed alibi and the scientific facts about the onset of rigor mortis. My right hon. Friend the Home Secretary has been reconsidering all the facts about the case for over nine months. I hope that he will be able either to release Lattimore and the other two boys convicted with him, or to refer the case back to the Court of Appeal shortly.
The Bill requires that before any statement by a mentally retarded person is admissible, either a solicitor must have been present throughout the interview when it was made, or the prosecution must satisfy stringent requirements to the court about the fairness of the interview and the voluntariness and reliability of the statement. I know that definitions in this area are difficult, especially regarding mental health. I propose that two of the four well-established categories of the Mental Health Act 1959, subnormality and severe subnormaility, should be covered by the Bill. They are well understood, and, because they apply to assessments for special schools, they are often undisputed matters of fact in court.
I realise that this area is being looked into by Lord Butler's Committee on mentally abnormal offenders, but it does not consider police interviews to come within its terms of reference. Therefore, my Bill should not clash with any recommendations that that comimttee makes. In any event, I am keeping in close touch with the Butler Committee during the preparation of the Bill.
I understand that the Home Office has set up a committee to experiment with the use of tape recorders during police interviews, and I hope that this experiment will lead to a situation similar to that which now obtains in the United States of America, where all citizens are accorded greater protection than here during police interviews. However, I

believe that the mentally retarded need special protection over and above this, partly because the reliability of their statements is liable not to be on a par with that of the statements of others, and partly because they stand in greater jeopardy of losing their liberty and their civic rights than do others who are sent to prison.
If a person ends up in Broadmoor, Rampton, where Colin Lattimore now is, or Moss Side, under Section 65 of the Mental Health Act, he is to all intents and purposes a potential "lifer". It is very difficult to get out. If an error has been made and these people continue to plead their innocence, that inhibits rather than assists their case for release.
I believe that the majority of the police will welcome a Bill of this kind, because the police do not like the allegations occasionally made about a small proportion of police interviews, any more than do hon. Members. I believe that the provisions of the Bill will, quite properly, cut down the number of such allegations as the habit grows of calling in a solicitor to listen to such interviews.
I have already had discussions about the Bill with the Minister of State at the Home Office. I am grateful to my right hon. Friend and to the Minster of State at the Department of Health for their interest. I hope after further discussion to persuade them to smile upon the Bill during its later stages.

Question put and agreed to.

Bill ordered to be brought in by Mr. Lewis Carter-Jones, Mrs. Lynda Chalker, Mr. Bryan Davies, Mr. Eric Moonman, Mr. Anthony Steen, Mr. D. E. Thomas and Mr. Christopher Price.

PROTECTION OF MENTALLY RETARDED PERSONS (EVIDENCE)

Mr. Christopher Price accordingly presented a Bill to regulate the admissibility of statements in evidence of mentally retarded persons; and the same was read the First time; and ordered to be read a Second time upon Friday 18th April 1975 and to be printed [Bill 101].

Orders of the Day — FINANCE BILL

[2nd Allotted Day]

Not amended in the Committee and as amended in the Standing Committee, further considered.

New Clause 4

RELIEF FOR SUCCESSIVE CHARGES

5
'.—(1) Where the value of a person's estate was increased by a chargeable transfer (in this section referred to as the previous transfer) made not more than four years before his death, the tax chargeable on his death under section 22 of this Act shall, subject to subsection (2) below, be reduced by the following percentage of the tax charged on so much of the value transferred by the previous transfer as is attributable to the increase, that is to say—


10
(a) by 80 per cent. if the period between the previous transfer and the death was one year or less;


(b) by 60 per cent. if that period was more than one year but not more than two years;


(c) by 40 per cent. if that period was more than two years but not more than three years; and


(d) by 20 per cent. if that period was more than three years.


15
(2) No reduction shall be made under this section with respect to an increase attributable to property which, at the time of the death, was settled property, if, under paragraph 5 of Schedule 5 to this Act, tax is chargeable on the death as if the value of that property were reduced.


20
(3) Where the value of a person's estate was increased on a death on which estate duty was payable, the preceding provisions of this section shall apply with the necessary modifications and, in particular, as if on that death there had been a chargeable transfer and the estate duty had been tax on the value transferred thereby.'—[Mr. Healey.]

Brought up, and read the First time.

3.48 p.m.

The Chancellor of the Exchequer (Mr. Denis Healey): I beg to move, That the clause be read a Second time.

Mr. Speaker: It will probably be for the convenience of the House if there is a general debate on this, which will include the amendments which will have to be moved later.

Mr. J. Enoch Powell: On a point of order, Mr. Speaker. I refer to the selection of amendments today. This is in no way related to your discretion in the selection of amendments. This is merely an inquiry that arises from the operation of the timetable procedure. The amendments grouped as selected for debate today appear to relate entirely to the new clauses, although there are matters and amendments relating, for example, to the schedules, which are printed on the Order Paper later and which relate to those same matters.
Would you be prepared to indicate to us whether it is your decision that these

amendments should be selected and, therefore, presumably debated on a later day, or whether you would look favourably upon hon. Members whose names are to these later amendments to the schedules taking part in today's debate, even though their amendments to the schedules cannot in the nature of things be either selected or not selected?

Mr. Speaker: My instinct is one of sympathy for the right hon. Gentleman. However, I should be unwise to express that sympathy too firmly, too quickly. Perhaps I might consider that point and give the right hon. Gentleman my reply later.

The Financial Secretary to the Treasury (Dr. John Gilbert): Further to that point of order, Mr. Speaker. As I understand it, your suggestion is that we have a general debate covering the amendments and the whole ambit of the new clause. Does that mean that you have in mind separate debates afterwards on the two groups of amendments, or merely separate Divisions?

Mr. Speaker: I shall have to see how matters develop.

Sir Geoffrey Howe: On the same point of order, Mr. Speaker. The Official Opposition visualised having one debate on each new clause embracing the debate on the groups of amendments and then proceeding to separate Divisions at the end of that single debate.
I can see why the Chair should have some sympathy with the suggestion by the right hon. Member for Down, South (Mr. Powell). On the other hand, it might be worth bearing in mind that if we had a debate on new Clauses 8 and 3, that would be the only opportunity for a significant debate on agriculture, whereas if we were able to reach the schedule attached to new Clause 8, that would give a further opportunity for a debate on that schedule, which relates to forestry. We were about to suggest that we might, therefore, try to concentrate the debate on new Clauses 8 and 3 on agriculture rather than on forestry. In making that suggestion, of course, we appreciate that we cannot bind the House, let alone yourself, Mr. Speaker.

The Chief Secretary to the Treasury (Mr. Joel Barnett): I point out that the new Clause 8 is only a paving clause for the schedule relating to forestry. It was my hope, Mr. Speaker, that you would be able to help us by allowing that schedule to be debated together with new Clause 8, otherwise it will be nonsense to debate a paving clause.

Mr. Speaker: I shall consider the matter.

Mr. Healey: As the House knows, new Clause 4 is the first of a number of new clauses and amendments affecting the capital transfer tax which the Government are introducing to fulfil the undertaking that I gave on 6th August when I first published the White Paper on the tax. I repeated that undertaking on 21st January when we considered the Bill in Committee on the Floor of the House. My undertaking was to consider any reasonable representations made either inside or outside the House and to seek to meet them if I was satisfied that otherwise an injustice might be done.
After so many hours, days and nights of discussion in detail, it is easy to lose

sight of the central fact, which is that the Government are now replacing a tax which was ineffective and unfair—ineffective because it was avoided on a colossal scale and unfair because it was avoided by only a minority of those affected and observed by the rest—by a tax that we believe to be fair and effective.

Mr. John Pardoe: Like the right hon. Gentleman, I had assumed that estate duty was avoided on a massive scale. However, some of the evidence that has come to light recently will tend to make us both believe that the avoidance was nothing like as great as had been supposed. Will the right hon. Gentleman give the House a figure of the revenue lost by avoidance? Capital transfer tax will bring in less revenue than did estate duty, which would seem to argue that avoidance was not that massive.

Mr. Healey: No, Sir. No Government can ever estimate the tax lost by avoidance. The hon. Gentleman is seeking to understand these matters. He will, on reflection, understand that that is so. Equally, it is impossible to estimate tax forgone by evasion, never mind avoidance. But I shall seek to show that avoidance was more widespread than many people suspected, and some of the amendments that we shall introduce in the next few days will take account of that fact.
No one, certainly not the hon. Member for Cornwall, North (Mr. Pardoe), will deny that estate duty was an avoidable tax. The volume and intensity of the protests against the attempts that the Government are now making to close the loopholes for avoidance is proof of the scale and range of the avoidance of estate duty. But we must also admit that avoidance was carried out by only a small section of those affected and a miniscule section of the population as a whole. If that is what the hon. Gentleman was seeking to suggest, I agree with him.
Unfortunately, this tiny section of the population—a tiny minority of the minority affected by the tax—is that section which the Conservative Opposition have sought to represent in our debates over recent weeks. I refer to some remarks made by the Leader of the Opposition when she spoke on the Bill in Committee upstairs. They are people for


whom a gift of £1,000 a year is too small for many ordinary circumstances. They are people for whom a wedding present of £2,500 is totally inadequate. Those are the views that the right hon. Member for Finchley (Mrs. Thatcher) expressed in Committee.
The Government are not prepared to make amendments to benefit this tiny minority of avoiders. As a result, we have been accused by the Conservative Opposition during our Committee discussions of destroying the sanctity of family life, of replacing the sanctity of family life by the drab orthodoxies of Eastern dictatorships, of operating against natural justice, and of handing over British business to the Arabs and the Americans.
This hyperbole bears very little relation to the facts, which are that the Bill allows any man or woman in this country to make a gift of £1,000 every year completely free of tax. The taxable gift starts at the same level as estate duty, namely, £15,000, but it is levied at rates that are substantially below the rates of estate duty, and those in respect of lifetime gifts are now very much lower still. Moreover—and this is a provision that initially was welcomed by right hon. and hon. Members on both sides of the House—for the first time since estate duty came into existence the Bill totally exempts gifts as between man and wife and thereby relieves widows and widowers of a burden which, on reflection, the Opposition would now regard as totally unfair, although they did nothing to relieve it when they had the power to do so.

4.0 p.m.

Mr. Peter Rees: Before the right hon. Gentleman leaves family life and the widows, and perhaps orphans, will he consider the point put to him by my hon. Friend the Member for Blaby (Mr. Lawson) during our debates about a person who allows his widowed mother or any relation the use of a house? The right hon. Gentleman was disposed to say then that only if there were a formal agreement would it be caught. Will he tell us about that aspect of family life before passing on to other matters?

Mr. Healey: I shall be glad to do so, even though I might be trespassing on your patience, Mr. Speaker, in answering a question so far removed from the clause.

The answer that I gave to the hon. Member for Blaby (Mr. Lawson) was on advice that I received. I have read with interest the points made by the hon. Gentleman in Committee upstairs. It is true that the precise juridical meaning of the word "use" in the clause is open to argument. For that reason, as I think the hon. and learned Member for Dover and Deal (Mr. Rees) knows, we have put down an amendment, which will be considered in the next few days, which will prevent the clause applying until April 1976. By that time we hope to have a completely satisfactory juridical formula.

Mr. Peter Rees: Why not now?

Mr. Healey: This is not required. It will not be effective until about a year from now. During that time we shall seek to resolve the juridical point so fairly made by the hon. and learned Gentleman. I do not know what point the hon. and learned Gentleman thinks he made when he intervened, but I see that he is quite satisfied with the answer that I have given.
Most of the men and women who make up the tiny minority of the total population in this country who are subject to estate duty now and will be subject to capital transfer tax in future have uncomplainingly paid higher rates than are now proposed. They will be much better off under the new legislation than under the old legislation. But the Government are able to help those who have paid tax over the last 80 years only because they are closing loopholes which existed for that tiny minority within the minority who were rich enough to hire lawyers and tax consultants to exploit the opportunities for dodging estate duty under the previous legislation.
When the White Paper which contained indications of all the provisions in the Bill was first published, it was universally recognised to be a fair and long overdue reform in our tax system. Indeed, The Times at that date stated:
The Government have shown reason and moderation in formulating its proposed gifts tax. … Indeed, it is the practical inadequacies of estate duty which make the proposed gifts tax … so acceptable.
It went on, in words so complimentary that I blush to repeat them, to point out that the gifts tax, capital transfer tax as we now call it, was a fair, just, long overdue reform which would close totally


unacceptable loopholes in the existing tax system.
However, as we all know, when the Government finally published the Bill containing the measures to implement the White Paper they faced a massive and orchestrated campaign not to improve but to destroy the Bill. That campaign is now being led by the right hon. and learned Member for Surrey, East (Sir G. Howe). I must remind him of what he said on Monday morning on a radio programme just before we were about to consider the Bill and long before any guillotine had been proposed. He said:
It is not a question of extra time for debate in the House. We shall be using our time in the House to use every legitimate parliamentary means to secure the withdrawal of this tax, and that is the object of our debate this week.
There was no question of improving the tax. The right hon. and learned Gentleman was seeking, as he has every right to seek—I am not complaining—to use every legitimate parliamentary means to prevent it reaching the statute book in any form whatever. We are using such legitimate parliamentary means as we think are appropriate to ensure that it does reach the statute book and shows that we are capable of implementing an undertaking on which we fought and won the General Election.

Mr. Tam Dalyell: As we are always being told that such-and-such is bringing Parliament into disrepute, may I ask whether my right hon. Friend agrees that the right hon. and learned Member for Surrey, East (Sir G. Howe) certainly did his share in that broadcast to bring Parliament into disrepute?

Mr. Healey: The right hon. and learned Gentleman may have sought to do that, but the disrepute was brought on himself rather than on the institution to which we all belong and to which the rest of us, at any rate, pay respect.
The interesting point is that the right hon. and learned Gentleman was not concerned with widows, small shopkeepers and small traders who benefit from the Bill. For the first time for 80 years the ordinary small shopkeeper or business man will now be able to pass on his business free of tax to his wife and to his children at a lower rate than in the past.

The right hon. and learned Gentleman was concerned exclusively with the tiny minority of our population who are having the opportunity of avoiding tax withdrawn from them altogether. Indeed, he was representing not those who vote for him but those who pay him.
The fact is—[Interruption.] We are delighted to see the hon. Member for St. Ives (Mr. Nott) on the Front Bench again after the unbridled attacks that he has recently been launching on the policies of the previous Government of which he was a member. We hope that he will show the same exuberance in castigating his right hon. Friends now that he is on the Opposition Front Bench as he did when fighting his way there from the back benches.
The Conservative leadership has revealed itself in its true colours as the defender of the rights of birth against the rights of ability and as representing those who believe that status, influence and wealth should depend on who one's father was, not what one is and has done.
There is a fundamental division on the Opposition Front Bench in this regard. It is one of the most fundamental divisions in British politics, and nothing reveals more clearly how fundamental it is than the hysterical excitement of hon. Gentlemen in debating this Bill which closes tax loopholes.
One point of interest has emerged from the debates. I revert here to the question asked by the hon. Member for Cornwall, North. The scale of avoidance was a good deal wider than most of us—I include the Government—imagined when the Bill was first introduced. More important than the scale of avoidance is the fact that after two generations of increasing avoidance of estate duty, whole sectors of our national life have come to depend on their ability to avoid a tax which Parliament introduced 80 years ago believing that it would and should be effective.
The right hon. Member for Farnham (Mr. Macmillan) put it fairly and clearly when, discussing this matter on the Floor of the House some weeks ago, he told us that there was indeed an element of truth in the argument that many family businesses survive only because of the loopholes in estate duty.

Mr. Peter Rees: Will the Chancellor substantiate his statement about avoidance by reference to the Finance Act 1894? Will he demonstrate that Mr. Harcourt, when he introduced the Bill, meant it to apply to lifetime gifts? This is a fundamental point. So far the right hon. Gentleman has misstated the facts.

Mr. Healey: As so often, the hon. and learned Gentleman is attempting to change the argument completely. When Mr. Harcourt introduced the Bill, he did so in words which I only wish were true—"We are all Socialists now"—but he was introducing a Bill which sought to introduce a duty on legacies. We are closing loopholes which existed in the legislation introduced by Mr. Harcourt by introducing taxes on lifetime gifts. The hon. and learned Gentleman is not without a certain understanding of these matters, and I suspect he understands what I am saying now in that regard.

Mr. Graham Page: I think that we should get clear what the right hon. Gentleman means by avoidance and loopholes. I gather that he includes in that all lifetime gifts to the family. Does he call that avoidance, and is that a loophole?

Mr. Healey: Of course it is avoidance.

Mr. Graham Page: Now we understand what the right hon. Gentleman means.

Mr. Healey: It is not evasion. The right hon. Gentleman will understand the difference between evasion, which is breaking the law, and avoidance, which is using defects in the law to avoid paying taxation. There is nothing illegal about avoidance, but there is nothing terribly attractive about it, either, from our point of view. What we are seeking to do is to close loopholes through which so many people have avoided taxation in the past.
The fact that sectors of our national life have come to depend upon their ability to avoid a tax is a fact that we cannot and should not ignore. Therefore, in the new clauses and amendments that we shall introduce over the next few days we are seeking to temper the wind to the shorn lamb and we shall be discussing over the next three days, in the main, detailed concessions which the Gov-

ernment have made to protect important sectors of our national life where a strict application of a fair and effective law would have produced results which were damaging to the national interest or were unfair.

Mr. Nicholas Ridley: The right hon. Gentleman will recall that, by a decision of Parliament, unemployment pay is not subject to income tax. Does he call that avoidance and a loophole? It is the same point as he is making. What Parliament has not sought to do is not a loophole. Surely the right hon. Gentleman will agree with the rightness of that.

Mr. Healey: Parliament took a conscious decision not to make unemployment pay subject to income tax, although the Conservative Party proposed to make it so subject under its tax credit system. In both cases Parliament was being invited to take a decision in full knowledge of its consequences. What I am arguing—and nobody can deny this—is that it was not the intention of Harcourt, or those who have increased or changed the form of estate duty since, to make it possible for it to be avoided on the massive scale on which it has been subject to avoidance in recent years. If Conservative Members are claiming that loopholes should continue to exist and that estate duty should remain an avoidable tax, let them have the guts to say so and defend that position in the country, because they will find that not one out of 10,000 of their supporters will follow them in that view.

Mr. Nigel Lawson: rose—

Mr. Healey: We were discussing the hon. Gentleman earlier on in a friendly way. I should like to proceed with my speech, and I think the House will agree that I have been generous about giving way.

Mr. Lawson: Will the right hon. Gentleman give way?

Mr. Healey: Not now; perhaps a little later. We are always pleased to see the combative and friendly face of the hon. Gentleman and metaphorically to dust his pants in as determined and friendly a fashion as he is prepared to do


physically on occasions when he disagrees with someone on the Government benches.
During the next three days we shall discuss detailed concessions that the Government are making to fulfil the objectives that I have stated. The most important concessions, and those of most interest to the House and the country, are those which I said I intended to make when we started the Committee stage of the Bill on the Floor of the House about a month ago, namely, on agriculture, small businesses, forestry, the national heritage and charities. I point out to the House that we are putting charities in a far more favourable position than they were under the previous régime. These are all concessions which I volunteered to make before Conservative Members went into the Long March and which were welcomed by them when I stated this intention.
The hon. and learned Member for Dover and Deal is getting into a little lather about Marxism. Will he tell us what he is saying?

Mr. Peter Rees: As the right hon. Gentleman challenges me, I can tell him that these Marxist analogies come readily to his lips because his views are redolent with Marxist thinking.

4.15 p.m.

Mr. Healey: The House regards the moth-eaten McCarthyism of the hon. and learned Gentleman with more sympathy and tolerance than disgust, though I dare say some people outside the House would not be quite so tolerant.
The concessions that the Government are making were forecast at the beginning of our Committee discussions and I am now implementing the undertakings I then gave.
New Clause 4 is of less general interest. We are introducing it not because it affects an important sector of our national life, but because, on reflection, and after listening to the arguments put to us, particularly in Standing Committee, by Conservative Members, we came to the conclusion that it would be fair to do so. As the House knows, the essential purport of the new clause is to relieve unsettled property of excessive taxation when the donee dies very soon after the

initial transfer was made. As the House knows, Schedule 5 already provides for quick succession relief for settled property, and the new clause extends the provision to unsettled property.
As we are to take with the new clause the amendments which you, Mr. Speaker, have selected, perhaps I may explain why we do not find it possible to accept them and why we have put down the clause as it stands.
I deal first with the question of rates. The rates that we have chosen are those proposed by the official Opposition in Standing Committee in their Amendment No. 52. I find it a little astonishing that they now come along and propose a completely different set of rates. They are a little greedy, and their behaviour in this respect gives some colour to the statement of objective by the right hon. and learned Member for Surrey, East on the radio on Monday. These are not serious amendments. This is an attempt merely to delay and prolong discussion. The rates are the same as those proposed by the official Opposition and, except for the reduction from five years to four years, the percentage reductions are more generous than those under estate duty, despite the fact that the CTT scale of rates is lower than that under estate duty. That deals with one group of amendments.
There is another group of amendments asking us to give relief in the case of the second transfer not only on death but on lifetime gifts. To do so would be to go against the whole sense of quick succesion relief. We are giving relief on death, and death only, because death is the only event that gives rise to unforeseeable transfers and unforeseeable liability to CTT. A man has no reason whatsoever to make a lifetime gift within four years of a previous transfer unless he is willing to accept a liability to CTT.
The provision in our new clause is precisely the same as the provision under estate duty, which has stood on the statute book for many years and which the Conservative Party when it was in office never sought to change. Again, I suggest that the amendments they are proposing here are essentially filibustering amendments intended to prolong discussion and not intended to elicit serious consideration.
There is, however, one important variant—I concede this—to the régime under estate duty. That is the use of a tax credit instead of reduction of value as the basis on which the liability to tax is calculated.
As the House will know—although I do not insist that all hon. Members should accept this argument—that the reason for that is that it is very difficult indeed to trace unsettled property after the first transfer and to distinguish it from the rest of the property which belongs to the donee—impossible, in fact, to do so—without a degree of administrative vexation and juridical complication, which I think it would be contrary to the general interests to accept.
For that reason we have instead taken a percentage of the first tax as the basis for calculating the relief rather than a percentage of the value at the time of the second transfer.
For all these reasons. I commend the new clause to the House.

Sir Geoffrey Howe: As the House knows only too well, we are working under a very strict timetable motion for these proceedings and I wish to speak as briefly as I can, not only to the new clause but to the amendments which are being discussed with it, in the hope that we may proceed with the other 15 debates in all that may be possible during the less than eight hours which are available to us—even if we do not vote at all against any of the Government's proposals or in support of any of our proposals.

Mr. Dennis Skinner: Get on with it.

Sir G. Howe: I shall get on with it, indeed. I wish to get on with it, first, by dealing with the astonishingly unctuous and patronising observations made by the Chancellor of the Exchequer and shared in quasi-choric fashion by his hon. Friend the Member for West Lothian (Mr. Dalyell) about what I said on radio on Monday. I said, with justification, that the Opposition would use every legitimate parliamentary means to prevent this tax reaching the statute book in this way and in this form. To hear the right hon. and hon. Members opposite talking about bringing Parliament into disrepute

is to raise astonishment inside and outside the House.
The right hon. Gentleman the Chancellor said that I had been following with interest the accumulation in every newspaper day after day of criticisms of what the Government are doing—the Financial Times on Saturday and The Guardian yesterday; and today I glance only at the headlines of three newspapers.

Mr. John Tomlinson: Will the right hon. and learned Gentleman give way?

Sir G. Howe: No. [HON. MEMBERS: "Oh."] The Daily Mail, under the headline
Making a mockery of Parliament",
stated:
But the way this Labour Government is trying to force its ill-prepared and inadequately debated measure through Parliament is utterly to be deplored.
Who is standing on the side of parliamentary reputation now? The Opposition are, and not the Labour Party.
The Daily Express, under the headline "Misgovernment", states—[Interruption.] I should be happy to harken to the Chancellor's laughter if he could identify a single newspaper of repute that sided with him in this matter, but he cannot do SO. [HON. MEMBERS: "The Morning Star."] I dare say that the Morning Star naturally might be one, but there are not many others.
The Daily Express has stated
What makes this particular blade so obnoxious is that the Capital Transfer Tax (part of the Finance Bill) is, for Britain, a whole new concept in taxation which could produce many unforeseen and possibly disastrous consequences for small businesses, farms, family relationships and, ultimately, even for our way of life. To rush through such legislation is an abuse of the parliamentary system.
Finally, The Times, under the headline "Legislative Chaos", states precisely the point that I have made throughout our debates:
The right thing to do with those clauses of the present Finance Bill concerned with the Capital Transfer Tax is to separate them and to reintroduce them later, after more mature consideration.
That is the strength of the case I have been making and am making here again today.
The new clause, so far as it goes, is welcome. But why on earth was it left out in the first place? We have had the answer in statements made throughout our proceedings, most notably and most candidly by the Chief Secretary in the debate on Second Reading, when he said:
Preparation of the capital transfer tax legislation has been a mammoth task involving the framing of a complete new code.
He also said:
As a result of the difficulties we have had in framing the tax, there are certain matters with which there was insufficient time to deal in the Bill as published".—[Official Report, 17th December 1974; Vol. 883, c. 1379–80.]
He can say that again!
Again, we find that even today the Chancellor, in another piece of euphemistic newspeak in answer to my hon. and learned Friend the Member for Dover (Mr. Rees) has decided to postpone altogether the operation of Clause 39 for 12 months, with the bland statement "It will take us at least that time to find a really satisfactory juridical answer." If that is true of the one clause which he thinks he can afford to postpone for 12 months, is it not true of every other clause?

Mr. Healey: The right hon. and learned Gentleman is making a great deal of the fact that the Government, on this important tax which seeks to limit tax avoidance, have listened to serious argument and sought to meet it by amendment. Would he not agree that this was a more responsive attitude than that which he adopted when he introduced a Bill not so long ago, under the threat of a guillotine, the purpose of which was not to close tax loopholes but to limit liberty? When that Bill was actually enacted it was found totally inoperable and required the use of a squalid device, the use of the Tipstaff, to permit its operation at all? The Conservative Party finally had to decide, if it ever had opportunity, never to introduce it again. Does the right hon. and learned Gentleman think that that is a better precedent?

Sir G. Howe: If the Chancellor is driven to such irrelevance in order to justify his monstrous tax, we are indeed in a sad plight. Let me remind him that in the debate on that previous Bill—if I

may follow him out of order for a second—we were willing to introduce dozens of amendments to meet representations made by the Labour Party, but the Labour Party, so dedicated was it to the preservation of parliamentary respect, was determined to vote against even those amendments that were made to meet its representation. Lunacy can go no further than that.

Mr. Speaker: Order. This is a Second Reading debate on this new clause. I think that although the debate can go fairly wide, it can go fairly wide only on the new clause.

Sir G. Howe: I am tempted, Mr. Speaker, to answer the desperate interventions by the Chancellor, but I shall remain within order.

Mr. Healey: Disgraceful.

Sir G. Howe: The extent to which the Government have been responding to these things is demonstrated again on this clause by what my hon. Friend the Member for Guildford (Mr. Howell) pointed out in Committee, that after putting down seven amendments to the clause the Opposition secured four concessions and the Chief Secretary said that he would look at two other matters. That was six out of seven, and still the concessions come forward. Other major concessions, apart from those made in this clause, are being made even at this eleventh hour. Many of them are inadequate. All of them are necessary. All of them recognise the overwhelming legitimacy of the case we have been making. To hear the right hon. Gentleman saying, as though it was a disreputable argument, that some of my hon. Friends have been saying that some of these provisions offended against natural justice is odd. How can that possibly be cited as a disreputable argument? The Chancellor knows full well that the way in which this legislation is being handled is doing, has been doing and will continue to do injustice to the rights of people to make representations about it.
Let me take another example of an amendment which we shall be considering later, in relation to political parties. The original provisions in the Bill, which sought to do, and would have done, great damage to every political party other than the Labour Party, supported as it is by trade union subscriptions, were not there


as a result of some error. The Chief Secretary, in discussing these provisions on Second Reading, said that the provisions had been considered. Yet today at last we see some concessions being made over political parties—not by error or a careless mistake but by a deliberate error after careful consideration.
The Chancellor, even so, seeks to take credit for the other concessions he was making in favour of charities. So far, so good. But what about the public bodies which fall outside the definition of charities or outside the definition of political parties? What about organisations such as the United Nations Association, the Disablement Income Group, many other well-deserving bodies, and the National Council for Civil Liberties? All of them enjoy relief under existing legislation, and for them the Chancellor has done nothing. It is another illlustration of the inadequacy of the concessions.
4.30 p.m.
The original Bill, wilfully or recklessly, was doing damage in many other directions—damage to the national heritage, damage to the farming industry, damage to forestry, and, perhaps above all, damage to small firms upon which millions of jobs depend.
The Chancellor sought to tell us that he was replacing an unfair and ineffective tax, if that is what it was. If he is replacing it by anything, he is replacing it by an unfair and destructive tax. It is deeply destructive, not of a minority of people whom he alleges we on this side seek to represent but of the foundations of many aspects of our way of life and destructive of the foundations of the employment of many people.
On all those matters the original proposals were profoundly wrong. The changes now proposed to be made are frank admissions of gross error, and in most, if not in all, cases they do not go far enough. This has happened because the Government, in introducing the legislation, have set out in pursuit of the wrong objectives and are proceeding from the wrong premises.
We on this side have made it amply clear, as did the previous Chancellor—Mr. Anthony Barber—that we have no quarrel with some form and some degree of capital taxation. Indeed, the same was said by my right hon. Friend the

Leader of the Opposition. The Government are wrong to proceed on any other footing. However, the Chancellor has a positive obsession with what he is pleased to call "avoidance" in some newspeak use of language, setting out at all times in pursuit of the mere fact that the existing law does not suit his misguided social objectives.
How can it be avoidance, for example, to take advantage of provisions which were deliberately left in the law by generations of Socialist Chancellors, by such wicked capitalist characters as Sir Stafford Cripps, and which were designed to promote the use of life assurance? Is it avoidance to take advantage of the relief given on life assurance premiums? Of course it is not. The Chancellor does little credit to his cause by using the word in that way.
We have no quarrel with capital taxation of the right kind, but the Chancellor ignores the fact that in the United Kingdom already capital taxation is higher than in most other Western European countries. We are not concerned simply with estate duty. We have an accumulation of taxes on capital—capital gains tax, estate duty up to the present date, and stamp duty. The Government seek to add to that list not just capital transfer tax but the wealth tax as well.
The capital transfer tax that is proposed, so far from being designed to distribute or redistribute wealth, will have the effect of destruction and confiscation. It will have the effect of centralising not just wealth but power and initiative in the hands of the State and giant corporations.
The Chancellor chose to tease my hon. Friends for referring to the prospect of companies passing into the hands of the Arabs or the Americans. There will be little prospect of small thriving business enterprises remaining in the hands of anybody else if the Chancellor has his way under this legislation.
Clearly, the Chancellor's objectives are wrong. He will not be helping the weak by destroying the strong. He will only be penalising thrift and enterprise and threatening the jobs of millions of people throughout the country who depend upon small firms, small farms and such enterprises.
To hear the Chancellor seeking to defend the small shopkeeper is like listening to some absurd chorus by the wolf in praise of Little Red Riding Hood.
The only purpose of the higher rates which are proposed is to achieve the destruction which the Chancellor intends. With the high rates proposed in this legislation, it was folly in the first place to exclude the quick succession relief which we welcome in the new clause. Because of the high rates, we are pressing the first group of amendments to give some relief for transfers except on death. Without such further relief, small businesses will face the risk of extinction within a generation, and many jobs will go with them.
All the changes proposed in our amendments are made necessary by the high effective rates proposed. The rates set out in the original White Paper, even though amended, are made all the higher by the Revenue's right to exact tax from the donor at its option, by the bizarre right to gross up the figure upon which tax is payable so that the tax can be payable even upon tax, with the consequence that rates of tax upon capital will in some cases exceed 100 per cent.
No economic justification for the tax in this form has been suggested. There can be none. Nor can there be any social justification for confiscation on this scale. The Chancellor and his right hon. and hon. Friends have brought before Parliament what amounts in the end to a prescription for a peasant society. That is why, although we welcome the new clause, I am happy to press the amendments standing in my name.

Mr. Tomlinson: The intervention by the right hon. and learned Member for Surrey, East (Sir G. Howe) contained about five relevant words. Those words were that the Tories welcomed the new clause.
The right hon. and learned Gentleman asked why the clause was left out in the first place. Today the right hon. and learned Gentleman displayed a degree of churlishness which those of us who have hitherto respected him as a great libertarian and upholder of parliamentary procedures found surprising in him. It was churlish of the right hon. and learned

Gentleman to ask why the clause had not been put in in the first place and then to say that the Government had brought it forward in response to pressure by the Opposition. One would think from listening to the right hon. and learned Gentleman that that was a sign of weakness on the Government's part rather than that they had acted responsibly after being persuaded by reasoned argument.
We have in the capital transfer tax not the kind of bizarre picture painted by the right hon. and learned Gentleman, but a long overdue fundamental tax reform. The right hon. and learned Gentleman was guilty of a travesty of the truth in referring to the areas in which he said that the Opposition had been pressing for change—agriculture, small businesses, charities, forestry, the national heritage. In every major area of change the commitment to change the original proposal in the Bill was made by the Governmnt before we spent the 165 hours in Committee.

Mr. Ridley: I think the hon. Gentleman was not a member of the Committee.

Mr. Joel Barnett: Of course he was.

Mr. Ridley: The hon. Gentleman did not say a word in Committee. He was such a distinguished member of the Committee that I regret I failed to notice him. Will he say when the proposal for a lower rate on lifetime gifts was brought in? If he does not remember that being introduced halfway through the Committee stage, he cannot have been listening.

Mr. Tomlinson: Government Members who were members of the Standing Committee could not help noticing the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) because of his constant interruptions and the filibustering in which he was a leading participant. I am sure that if he wants to participate in this debate and put his point of view once again, he will succeed in catching your eye before midnight, Mr. Deputy Speaker.
I was saying that on all the major issues—agriculture, small businesses, charities, forestry, and the national heritage—the commitment, whether the hon. Gentleman likes it or not, was made by


the Government before we had the marathon 165 hours in Committee.

Mr. Ridley: rose—

Mr. Tomlinson: No, I will not give way to the hon. Gentleman again. Anyone who gave way a second time having just received such a mouthful of abuse would not deserve to be a Member of the House. I shall listen to the hon. Gentleman with interest if he succeeds in catching the eye of the Chair.
In all the major areas, as I was saying and as I shall continue to say, even if hon. Members want to continue to filibuster at this stage of the argument, the Government had made their commitment long before the matter came under discussion upstairs. The present arrangements under the capital transfer tax leave many of the areas much more favourably treated than they were under the old estate duty.
We hear a lot about the small shopkeeper and the small businessman. When I hear about these busy entrepreneurial activists, I am at a loss to understand why we are in such a desperate economic plight today. Many of them are much more favourably treated by capital transfer tax than they were under the old estate duty.
This is certainly the case with many charities. It is nonsensical for the right hon. and learned Member for Surrey, East to complain about charities such as Shelter and the National Council for Civil Liberties when he knows that even under the Conservative Government none of those organisations received charitable status. For those bodies which have charitable status, the present arrangement under capital transfer tax is much more favourable. I believe that what we have to do as a totally separate issue is to look much more widely at the definition of a charity.

Mr. John Cope: I am sure that the hon. Gentleman would not wish to mislead the House. The definition of a charity in the context of estate duty was that it had a public and charitable purpose, which is a wider definition than the definition used in the Bill, either originally or under the proposed new clause. Those charities to which my right hon. and learned Friend referred received concessions under estate duty but

will not get them under capital transfer tax.

Mr. Tomlinson: That is not my understanding at the moment, but I shall certainly consider what the hon. Gentleman has said.
I am sick and tired of hearing about what the BBC said on Monday morning. We have had it quoted five times so far. Instead of having this long, wide-ranging debate, hon. Members should say to the Government "Thank you for the constructive arguments. We welcome new Clause 4 unreservedly." We should not have the kind of grudging attitude adopted by Opposition Members. If they have any real desire for progress in our proceedings, they should say that they welcome the new clause. Instead of advancing their arguments over and over again, they should get on with the other topics which they allege they have not had time to discuss.

Mr. Pardoe: I wish to refer to the first amendment in the second group selected for discussion with this new clause.

Mr. Deputy Speaker (Mr. Oscar Murton): Order. Perhaps I can help the hon. Gentleman. We are discussing the new clause in general terms. Should he wish to move his amendment in detail, an opportunity to do so will arise at a later stage. At the moment, discussion is on the new clause.

Mr. Pardoe: My understanding of the decision made by Mr. Speaker earlier was that that was rather an open question, but that he would wait to hear the nature of the debate before giving a decision. I understand also that it was the view of the Opposition—and certainly we support them in this—that they would prefer to take the amendments in the general debate on the clause and vote on them later.

Dr. Gilbert: My understanding accords with the recollection of the hon. Member for Cornwall, North (Mr. Pardoe)—that we should have a general debate covering all the amendments and that there would be separate votes as appropriate. Mr. Speaker left the matter open as to whether there would be separate debates, but it would be left to your wisdom, Mr. Deputy Speaker, or to his whether we


should do so when we had concluded the main comprehensive debate.

Mr. Deputy Speaker: I accept that that was Mr. Speaker's ruling.

Mr. Pardoe: I was trying to address my remarks not to the generality of the clause, but to the first amendment in the second group selected for discussion with this new clause. I refer to Amendment (n), in line 6, at end insert:

(a) by 100 per cent. if the period between the previous transfer and the death was two months or less;
(b) by 90 per cent. if that period was more than two months but not more than six months'.

The Chancellor referred to the two groups of amendments, in my view, wrongly. He was quite correct in saying that the first group of amendments sought to change the rates which the Opposition suggested in Committee, and I understand his reasons for discarding that argument. He then went on to say that the second group was designed to extend the concession in the new clause to lifetime gifts. That is not the case—I hope the Financial Secretary will accept this—because that is not the purpose of Amendment (n).
4.45 p.m.
The purpose of the new clause is excellent. It is to deal with the problem of quick succession. We accept that the Government have met the arguments in Committee at least partly if not to the extent that some of us wish. But the Government are being less than generous in the choice of the period to which the concession refers. In other words, they propose a figure of 80 per cent. for the first 12 months or less.
We feel—and I think this will have the support of both sides of the House—that a very different situation can arise. There can be a situation in which a person who receives a gift dies in the same car crash as the person who makes the gift. That is an obvious example. A father and son might be involved in the same car crash. One might die before the other, although their deaths might be almost instantaneous, or one might die instantaneously and the other perhaps a month later of injuries received in that crash.
That case is very different from those that the Government are covering in this clause. Therefore, we are seeking to subdivide the first 12 months. We say that if this disaster should strike in the first two months, there should be no tax payable at all on that transfer. We say, further, that after the two months but within six months a figure of 90 per cent. should apply, and beyond that the Government's figures seem to us to be reasonably fair.
There is not only the case of two people killed in the same accident. One can think of other examples. There is the possibility of a gift being made to a person when, in view of the nature of the circumstances, he should not have accepted it. One can call various circumstances to mind. A man might be on his death-bed but not know that he is dying. Somebody might make a gift to him and he might accept it. Nobody would say to him "You are dying of cancer and you must not take this gift" because there is clearly a family conspiracy to shelter him from the knowledge that he is dying. He might accept the gift in good faith and then die a few days later. That situation should be covered, as it would be if our amendment were accepted.
I therefore hope that the Financial Secretary will not simply rely on the words of the Chancellor in turning down this amendment. It is not an attempt to extend this concession of the new clause to gifts during lifetime. It is an attempt to make a distinction between the situation covered by the Government's new clause, where two deaths occur within a period of 12 months, which seems to be perfectly reasonable, and the situation where the deaths occur in a much shorter span.
I hope that the Financial Secretary will recognise that the situation covered by the amendment is rather different, and that the amendment does not seek to drive a wedge into the principle of the tax or into the principle of the proposed new clause.

Mr. Patrick Cormack: I shall be brief, because the House has a lot of work to get through today. When the Chancellor of the Exchequer began—it is noteworthy that he has left early—he assumed a mantle


of generosity as convincing as vows of chastity by Casanova on his deathbed. He tried to persuade us that his beneficent tax had been modified by the Government in such a way as to bring great benefit to many people. Throughout our debates on these matters, the right hon. Gentleman has used his hatchet men, appearing himself at the last minute, then disappearing.
Throughout the wholly admirable and entirely justifiable strictures applied to his proposals by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), the Shadow Chancellor, the right hon. Gentleman guffawed his way along—

Mr. Robert Kilroy-Silk: Where is the right hon. and learned Gentleman? He is such a "shadow" that he has disappeared.

Mr. Cormack: No doubt, he is looking for the Chancellor, and it would be a good thing if he found him.
The Chancellor accused my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) of being a motheaten McCarthyite. Anyone who knows about moths realises very well that during his short stay at the Treasury the Chancellor has brought forth more moths to break through, corrupt and the rest than any other Chancellor in living memory. The right hon. Gentleman combines all the least endearing characteristics of the two Cromwells.

Mr. Pardoe: I am perplexed. Which two Cromwells? There have been several.

Mr. Cormack: The two great Cromwells, Thomas and Oliver, who had, one might say, varying characteristics, and the right hon. Gentleman combines the least endearing of them both.
The truth is that in this tax the Chancellor has taken on the wrong people at the wrong time and for the wrong reason. We must come back to the fundamental point, that the Chancellor's aim should be to raise revenue through taxation and not to clobber people or undermine the whole fabric of our society. The right hon. Gentleman will be remembered as the most Draconian figure in the Treasury for many a long year. He will be thought of by future generations with the same degree of revulsion and horror as was

the squanderbug figure which haunted the childhood of many of us at the end of the war—squandering the best resources of the nation through the ill-thought-out and ill-considered schemes which he has put before the House.
Nothing could more clearly show the justice of what I say than the way in which the Government are forcing this tax through without adequate time for debate. We ought to be able to debate the capital transfer tax at length—

Mr. Tomlinson: Get on with it then.

Mr. Cormack: When the Chancellor talks—we are, of course, thankful for small mercies—of certain concessions for agriculture, forestry and the national heritage, everyone knows that those most closely involved with these matters understand that the concessions do not go far enough and do not meet the legitimate cases which have been advanced, yet the House is not to have time adequately to deploy the argument.
It is essential that we have at least a brief debate on some of the vital matters of concern to agriculture, small businesses and the rest. The way that we now have to work is a damning indictment of the Government's handling of this whole business, and there has been a splendid endorsement of that indictment in today's leading article in The Times, which talks about the way in which the Government are mismanaging the nation's financial affairs.

Dr. Gilbert: I have some difficulty in addressing myself to most of the amendments to the new clause, which I expected to be my task at this stage, because, with the exception of the hon. Member for Cornwall, North (Mr. Pardoe), no member of the Opposition has directed a word to any of the amendments. I take it that hon. Members consider them of trivial importance and they propose, therefore, not to divide on them. They have certainly given no attention to them.
We had not a word from the right hon. and learned Gentleman the Member for Surrey, East (Sir G. Howe), the ephemeral Shadow Chancellor, as to the rate of relief, as to the changed basis of relief, or as to the extent of the relief for lifetime transfers by the donee. It is not surprising that he did not address himself to the rate of relief, because our new clause


adopts in toto the proposals pressed upon us in Standing Committee. Why the Opposition should suddenly have a change of mind in the space of about eight or nine days I do not know, but I am happy to see them flexible in these matters. It is, however, a little churlish of them to accuse us of excessive flexibility whenever we change our minds to meet points pressed upon us by them.
Be that as it may, I come now to the point made by the right hon. and learned Gentleman—I am searching to find parts of his speech to take hold of and to address myself to—when he said something about public bodies being disadvantaged under the new proposals. I accept that there may be some difficulties there, but most public bodies will benefit either by the £100 a year relief to donees or by the £1,000 a year tax-free transfer available to them under the tax or by out-of-income transfers. If there are further problems which are not covered by those tax-free reliefs, we shall be prepared to look at them.

Mr. Lawson: The hon. Gentleman has referred to the £1,000 a year exemption. Can he assure the House—this is an important matter—that the new Government amendment to Schedule 6, which we are likely to reach, dealing with the £1,000 a year exemption, is not intended to signify, as it seems to us to do, that the £1,000 exemption shall no longer be over and above the other exemptions under the Bill?

Mr. David Howell: Will the hon. Gentleman allow me to come in here? This is an extremely important matter, and it has, we know, caused a lot of confusion outside the House over and above all the confusion to which we have been subjected by the Government's various amendments. We shall have to look at this matter very carefully, and I ask the Financial Secretary to address his mind to it. Obviously, he cannot answer fully at this stage, but will he come back to the matter at some stage in the next few days while we are debating the tax?
I refer the hon. Gentleman to page 92 of the Bill, Schedule 6, paragraph 2, where there is a Government amendment down to delete words in line 17. This is puzzling us, and we want clarification since it is a most important matter.

Dr. Gilbert: I am obliged to the hon. Gentleman for the moderate way in which he puts the matter. I shall look at it. It is certainly not the Government's intention in any way to diminish the reliefs available by amendments put down in this sense to Schedule 6. We shall have an opportunity to debate the matter if the Opposition choose so to use the time available to them.
I was saying that most public bodies will face no difficulties under the tax. If there are difficulties, my right hon. Friend will review them most sympathetically, just as we intend in due course to review the charity laws, which, as hon. Members opposite will acknowledge, I am sure, at present contain many anomalous and unsatisfactory features.
We were able to extract one nugget from the right hon. and learned Gentleman's speech—to be fair, I never doubted it—and that was a renewed commitment, on his part at least, to the principle of a tax on lifetime transfers. We are extremely grateful to have that established yet again from the Opposition Front Bench. I am the first to acknowledge that the hon. Member for Guildford (Mr. Howell) also has been quite candid with his hon. Friends in accepting the case in principle for a tax on lifetime transfers. I notice that he was berated for his pains in the correspondence columns of the Daily Telegraph the following day, but I am sure that his shoulders are broad enough to bear abuse of that sort even in the Conservatives' tribal journal. I have no doubt that he will experience difficulties with some of his back benchers. We heard rumblings only today from the hon. and learned Member for Dover and Deal (Mr. Rees), who, regrettably, is not with us at the moment, and who dissented vigorously in principle from the proposal for a lifetime transfer tax when my hon. Friend the Chief Secretary mentioned it but was strangely muted when the hon. Member for Guildford accepted it.
5.0 p.m.
Those of us who were in Standing Committee heard the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) say how much he regretted the passing of estate duty and how nostalgic he was going to be about it. His


reason was simply that estate duty was—and this was its great merit in his eyes—an avoidable tax. That is why we believe that it should have been swept from the statute book long ago, and my hon. and right hon. Friends and I are delighted to be the agents of its disappearance.
Perhaps I may now deal with the remarks of the hon. Member for Cornwall, North, who made the only pertinent comment on the clause or the amendments.—[Interruption.]

Mr. Joel Barnett: What about our hon. Friend the Member for Meriden (Mr. Tomlinson)?

Dr. Gilbert: I was directing my comment only to speeches from the Opposition side of the House. I shall come to my hon. Friend's contribution in due course. This is the sort of meal in which we save the caviare for the end.
The hon. Member for Cornwall, North was attempting to create a new segment of relief within the one-year relief that we are proposing. There is no difference in principle between us in what he is seeking to achieve. However, his amendment, as drafted, has certain technical defects. He will be the first to recognise that their effect will be to enable both the 100 per cent. and the 80 per cent. relief to be claimed within the first two months and for both the 90 per cent. and the 80 per cent. reduction to apply if death occurs within the six-month period. I am sure that is not his intention.
This is essentially a question of a dividing line. I do not claim perfection for my right hon. Friend's proposals, but the 80 per cent. relief that we are proposing for death within one year is greater than that available under the estate duty provisions, although by the nature of things we cannot make precise comparisons. The situation is considerably eased in a great many of these "quick succession" cases because of the relief my right hon. Friend has introduced for estates passing to widows. This is one of the aspects of the tax of which we are extremely proud. For the first time it will mean that a widow or a widower—but usually a widow—who suffers bereavement will not shortly afterwards suffer severe economic loss and be forced to sell

her or his home to pay the estate duty in addition to suffering the economic loss resulting from the loss of the breadwinner.
I am sure that hon. Members will welcome this enormous reform of out estate duty legislation, a reform which has been long overdue and which will cover a great multitude of cases which were the cause of concern to the hon. Member for Cornwall, North.
My right hon. Friend's proposals in the new clause give only rough justice, and we accept that. We are clear in our minds that it is an improvement to the estate duty provisions, however, and I have no difficulty in commending it to the House.

Mr. David Howell: I concede that there have been moments in the past when my hon. Friends and I have been a little critical of the Financial Secretary. We have pointed to the somewhat prolonged and sometimes difficult speeches he had to make in Committee with apparently inadequate briefing. I concede that we were at times even a little too critical. Having heard the ignorant rumblings of the Chancellor of the Exchequer, we realise how grateful we must be for small mercies.
This is not the time for long speeches. The Government have put the strong arm on all these amendments and we have little time to discuss them. There is no reason to be defensive about putting down amendments to the new clause, particularly since we did not know in Committee, and we still do not know in detail, how the Government will be treating capital gains tax on death. This will make an additional burden and therefore we have every right to oppose the totting up of these burdens.
However this tax is levied, even with these concessions, it will lead to astronomical rates through grossing up, accumulation and capital gains tax. It will be far higher than anything under estate duty and will cover many areas that estate duty never touched. That is justification enough for putting down the amendments.
My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) argued that Amendments (a) and (b) had great validity in relation to the the quick


succession relief which should be extended to transfers on life. The hon. Member for Cornwall, North (Mr. Pardoe) made an excellent case, and a case demanding some compassion, for extension in other areas as well, and I recommend my right hon. and hon. Friends to press both amendments to Divisions.

Question put and agreed to.

Clause read a Second time.

Amendment proposed to the proposed new Clause: (a), in line 3, leave out the first 'his death' and insert 'the transfer'.—[Mr David Howell.]

Question put, That the amendment be made:—

The House divided: Ayes 246, Noes 284.

Division No. 124.]
AYES
[5.07 p.m.


Adley, Robert
Gardner, Edward (S Fylde)
McNair-Wilson, M. (Newbury)


Aitken, Jonathan
Gilmour, Sir John (East Fife)
McNair-Wilson, P. (New Forest)


Alison, Michael
Glyn, Dr Alan
Madel, David


Atkins, Rt Hon H. (Spelthorne)
Goodhart, Philip
Marshall, Michael (Arundel)


Awdry, Daniel
Goodhew, Victor
Marten, Neil


Baker, Kenneth
Goodlad, Alastair
Mates, Michael


Banks, Robert
Gow, Ian (Eastbourne)
Mather, Carol


Beith, A. J.
Gower, Sir Raymond (Barry)
Maude, Angus


Bell, Ronald
Grant, Anthony (Harrow C)
Maudling, Rt Hon Reginald


Bennett, Dr Reginald (Fareham)
Gray, Hamish
Mawby, Ray


Benyon, W.
Grieve, Percy
Maxwell-Hyslop, Robin


Biffen, John
Griffiths, Eldon
Mayhew, Patrick


Biggs-Davison, John
Grimond, Rt Hon J.
Meyer, Sir Anthony


Blaker, Peter
Grist, Ian
Mills, Peter


Bowden, A. (Brighton, Kemptown)
Grylls, Michael
Miscampbell, Norman


Boyson, Dr Rhodes (Brent)
Hall, Sir John
Mitchell, David (Basingstoke)


Bradford, Rev Robert
Hall-Davis, A. G. F.
Moate, Roger


Braine, Sir Bernard
Hamilton, Michael (Salisbury)
Molyneaux, James


Brittan, Leon
Hampson, Dr Keith
Monro, Hector


Brotherton, Michael
Hannam, John
Montgomery, Fergus


Brown, Sir Edward (Bath)
Harrison, Col Sir Harwood (Eye,
Moore, John (Croydon C)


Bryan, Sir Paul
Harvie Anderson, Rt Hon Miss
More, Jasper (Ludlow)


Buchanan-Smith, Alick
Hastings, Stephen
Morgan-Giles, Rear-Admiral


Buck, Antony
Havers, Sir Michael
Morrison, Charles (Devizes)


Bulmer, Esmond
Hayhoe, Barney
Morrison, Hon Peter (Chester)


Burden, F. A.
Heseltine, Michael
Mudd, David


Butler, Adam (Bosworth)
Hicks, Robert
Neave, Airey


Carr, Rt Hon Robert
Holland, Philip
Nelson, Anthony


Chalker, Mrs Lynda
Hooson, Emlyn
Neubert, Michael


Churchill, W. S.
Hordern, Peter
Newton, Tony


Clark, Alan (Plymouth, Sutton)
Howe, Rt Hon Sir Geoffrey
Normanton, Tom


Clark, William (Croydon S)
Howell, David (Guildford)
Nott, John


Clegg, Walter
Howell, Ralph (North Norfolk)
Onslow, Cranley


Cockcroft, John
Howells, Geraint (Cardigan)
Oppenheim, Mrs Sally


Cooke, Robert (Bristol W)
Hunt, John
Osborn, John


Cope, John
Irving, Charles (Cheltenham)
Page, John (Harrow West)


Cormack, Patrick
James, David
Page, Rt Hon R. Graham (Crosby)


Corrie, John
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Paisley, Rev Ian


Costain, A. P.
Jessel, Toby
Pardoe, John


Craig, Rt Hon W. (Belfast E)
Johnson Smith, G. (E Grinstead)
Parkinson, Cecil


Crouch, David
Jones, Arthur (Daventry)
Pattie, Geoffrey


Crowder, F. P.
Jopling, Michael
Penhaligon, David


Davies, Rt Hon J. (Knutsford)
Joseph, Rt Hon Sir Keith
Percival, Ian


Dodsworth, Geoffrey
Kaberry, Sir Donald
Peyton, Rt Hon John


Douglas-Hamilton, Lord James
Kellett-Bowman, Mrs Elaine
Pink, R. Bonner


Durant, Tony
Kershaw, Anthony
Powell, Rt Hon J. Enoch


Dykes, Hugh
Kimball, Marcus
Prior, Rt Hon James


Eden, Rt Hon Sir John
King, Evelyn (South Dorset)
Pym, Rt Hon Francis


Edwards, Nicholas (Pembroke)
King, Tom (Bridgwater)
Raison, Timothy


Elliott, Sir William
Kitson, Sir Timothy
Rathbone, Tim


Emery, Peter
Lamont, Norman
Rawlinson, Rt Hon Sir Peter


Eyre, Reginald
Lane, David
Rees, Peter (Dover &amp; Deal)


Fairbairn, Nicholas
Langford-Holt, Sir John
Rees-Davies, W. R.


Fairgrieve, Russell
Latham, Michael (Melton)
Renton, Tim (Mid-Sussex)


Farr, John
Lawrence, Ivan
Rhys Williams, Sir Brandon


Fell, Anthony
Lawson, Nigel
Ridley, Hon Nicholas


Finsberg, Geoffrey
Lester, Jim (Beeston)
Ridsdale, Julian


Fisher, Sir Nigel
Lewis, Kenneth (Rutland)
Rifkind, Malcolm


Fletcher, Alex (Edinburgh N)
Lloyd, Ian
Rippon, Rt Hon Geoffrey


Fletcher-Cooke, Charles
Loveridge, John
Roberts, Michael (Cardiff NW)


Fookes, Miss Janet
Luce, Richard
Roberts, Wyn (Conway)


Fowler, Norman (Sutton C'f'd)
McCrindle, Robert
Ross, William (Londonderry)


Fraser, Rt Hon H. (Stafford &amp; St)
McCusker, H.
Rossi, Hugh (Hornsey)


Fry, Peter
Macfarlane, Neil
Rost, Peter (SE Derbyshire)


Galbraith, Hon. T. G. D.
MacGregor, John
Sainsbury, Tim


Gardiner, George (Reigate)
Macmillan, Rt Hon M. (Farnham)
St. John-Stevas, Norman




Shaw, Giles (Pudsey)
Steen, Anthony (Wavertree)
Wainwright, Richard (Colne V)


Shaw, Michael (Scarborough)
Stewart, Ian (Hitchin)
Wakeham, John


Shelton, William (Streatham)
Stokes, John
Walker, Rt Hon P. (Worcester)


Shepherd, Colin
Stradling Thomas, J.
Walters, Dennis


Silvester, Fred
Tapsell, Peter
Warren, Kenneth


Sims, Roger
Taylor, R. (Croydon NW)
Weatherill, Bernard


Sinclair, Sir George
Taylor, Teddy (Cathcart)
Wells, John


Skeet, T. H. H.
Tebbit, Norman
Whitelaw, Rt Hon William


Smith, Cyril (Rochdale)
Temple-Morris, Peter
Wiggin, Jerry


Smith, Dudley (Warwick)
Thatcher, Rt Hon Margaret
Winterton, Nicholas


Speed, Keith
Thorpe, Rt Hon Jeremy (N Devon)
Wood, Rt Hon Richard


Spence, John
Townsend, Cyril D.
Young, Sir G. (Ealing, Acton)


Spicer, Jim (W Dorset)
Trotter, Neville
Younger, Hon George


Spicer, Michael (S Worcester)
Tugendhat, Christopher



Sproat, Iain
van Straubenzee, W. R.
TELLERS FOR THE AYES:


Stanbrook, Ivor
Vaughan, Dr Gerard
Mr. Spencer Le Marchant and


Stanley, John
Viggers, Peter
Mr. Anthony Berry.


Steel, David (Roxburgh)






NOES


Abse, Leo
Dormand, J. D.
John, Brynmor


Allaun, Frank
Douglas-Mann, Bruce
Johnson, James (Hull West)


Archer, Peter
Duffy, A. E. P.
Johnson, Walter (Derby S)


Armstrong, Ernest
Dunn, James A.
Jones, Alec (Rhondda)


Ashley, Jack
Dunnett, Jack
Jones, Barry (East Flint)


Ashton, Joe
Dunwoody, Mrs Gwyneth
Jones, Dan (Burnley)


Atkins, Ronald (Preston N)
Eadie, Alex
Judd, Frank


Atkinson, Norman
Edelman, Maurice
Kaufman, Gerald


Bagier, Gordon A. T.
Edge, Geoff
Kelley, Richard


Bain, Mrs Margaret
Edwards, Robert (Wolv SE)
Kerr, Russell


Barnett, Guy (Greenwich)
Ellis, John (Brigg &amp; Scun)
Kilroy-Silk, Robert


Barnett, Rt Hon Joel
Ellis, Tom (Wrexham)
Kinnock, Neil


Bates, Alf
English, Michael
Lambie, David


Bean, R. E.
Ennals, David
Lamborn, Harry


Benn, Rt Hon Anthony Wedgwood
Evans, Gwynfor (Carmarthen)
Lamond, James


Bennett, Andrew (Stockport N)
Evans, Ioan (Aberdare)
Latham, Arthur (Paddington)


Bidwell, Sydney
Evans, John (Newton)
Leadbitter, Ted


Blenkinsop, Arthur
Ewing, Harry (Stirling)
Lever, Rt Hon Harold


Boardman, H.
Ewing, Mrs Winifred (Moray)
Lewis, Ron (Carlisle)


Booth, Albert
Fernyhough, Rt Hon E.
Lipton, Marcus


Boothroyd, Miss Betty
Fitt, Gerard (Belfast W)
Loyden, Eddie


Bottomley, Rt Hon Arthur
Flannery, Martin
Luard, Evan


Boyden, James (Bish Auck)
Fletcher, Ted (Darlington)
Lyon, Alexander (York)


Bradley, Tom
Foot, Rt Hon Michael
Lyons, Edward (Bradford W)


Bray, Dr Jeremy
Ford, Ben
McCartney, Hugh


Brown, Hugh D. (Provan)
Forrester, John
MacCormick, Iain


Brown, Robert C. (Newcastle W)
Fowler, Gerald (The Wrekin)
McElhone, Frank


Buchan, Norman
Fraser, John (Lambeth, N'w'd)
MacFarquhar, Roderick


Butler, Mrs Joyce (Wood Green)
Garrett, John (Norwich S)
Mackenzie, Gregor


Callaghan, Jim (Middleton &amp; P)
Garrett, W. E. (Wallsend)
Mackintosh, John P.


Campbell, Ian
Gilbert, Dr John
Maclennan, Robert


Canavan, Dennis
Ginsburg, David
McMillan, Tom (Glasgow C)


Carmichael, Neil
Golding, John
McNamara, Kevin


Carter, Ray
Gould, Bryan
Madden, Max


Carter-Jones, Lewis
Gourlay, Harry
Magee, Bryan


Castle, Rt Hon Barbara
Graham, Ted
Mahon, Simon


Clemitson, Ivor
Grocott, Bruce
Marks, Kenneth


Cocks, Michael (Bristol S)
Hamilton, W. W. (Central Fife)
Marquand, David


Cohen, Stanley
Hamling, William
Marshall, Dr Edmund (Goole)


Coleman, Donald
Hardy, Peter
Marshall, Jim (Leicester S)


Colquhoun, Mrs Maureen
Harper, Joseph
Mason, Rt Hon Roy


Concannon, J. D.
Harrison, Walter (Wakefield)
Meacher, Michael


Conlan, Bernard
Hatton, Frank
Mellish, Rt Hon Robert


Cook, Robin F. (Edin C)
Hayman, Mrs Helene
Mikardo, Ian


Corbett, Robin
Healey, Rt Hon Denis
Millan, Bruce


Cox, Thomas (Tooting)
Heffer, Eric S.
Miller, Dr M. S. (E Kilbride)


Craigen, J. M. (Maryhill)
Henderson, Douglas
Miller, Mrs Millie (Ilford N)


Crawford, Douglas
Hooley, Frank
Mitchell, R. C. (Soton, Itchen)


Crosland, Rt Hon Anthony
Horam, John
Molloy, William


Cunningham, G. (Islington S)
Howell, Denis (B'ham, Sm H)
Moonman, Eric


Cunningham, Dr J. (Whiteh)
Hoyle, Doug (Nelson)
Morris, Alfred (Wythenshawe)


Dalyell, Tam
Hughes, Rt Hon C. (Anglesey)
Morris, Charles R. (Openshaw)


Davidson, Arthur
Hughes, Mark (Durham)
Mulley, Rt Hon Frederick


Davies, Bryan (Enfield N)
Hughes, Robert (Aberdeen N)
Murray, Rt Hon Ronald King


Davies, Denzil (Llanelli)
Hughes, Roy (Newport)
Newens, Stanley


Davies, Ifor (Gower)
Hunter, Adam
Noble, Mike


Davis, Clinton (Hackney C)
Irving, Rt Hon S. (Dartford)
Oakes, Gordon


Deakins, Eric
Jackson, Colin (Brighouse)
Ogden, Eric


Dean, Joseph (Leeds West)
Jackson, Miss Margaret (Lincoln)
O'Halloran, Michael


de Freitas, Rt Hon Sir Geoffrey
Janner, Greville
Orbach, Maurice


Delargy, Hugh
Jay, Rt Hon Douglas
Ovenden, John


Dempsey, James
Jeger, Mrs Lena
Owen, Dr David


Doig, Peter
Jenkins, Rt Hon Roy (Stechford)
Padley, Walter







Palmer, Arthur
Shore, Rt Hon Peter
Varley, Rt Hon Eric G.


Park, George
Short, Rt Hon E. (Newcastle C)
Wainwright, Edwin (Dearne V)


Parker, John
Short, Mrs Renée (Wolv NE)
Walden, Brian (B'ham, L'dyw'd)


Parry, Robert
Silkin, Rt Hon John (Deptford)
Walker, Harold (Doncaster)


Peart, Rt Hon Fred
Silkin, Rt Hon S. C. (Dulwich)
Walker, Terry (Kingswood)


Pendry, Tom
Sillars, James
Ward, Michael


Perry, Ernest
Silverman, Julius
Watkins, David


Phipps, Dr Colin
Skinner, Dennis
Watkinson, John


Prentice, Rt Hon Reg
Small, William
Watt, Hamish


Prescott, John
Smith, John (N Lanarkshire)
Weitzman, David


Price, C. (Lewisham W)
Snape, Peter
Wellbeloved, James


Price, William (Rugby)
Spearing, Nigel
Welsh, Andrew


Radice, Giles
Spriggs, Leslie
White, Frank R. (Bury)


Rees, Rt Hon Merlyn (Leeds S)
Stallard, A. W.
White, James (Pollok)


Reid, George
Stewart, Donald (Western Isles)
Whitehead, Phillip


Richardson, Miss Jo
Stewart, Rt Hon M. (Fulham)
Whitlock, William


Roberts, Albert (Normanton)
Stoddart, David
Wigley, Dafydd


Roberts, Gwilym (Cannock)
Strang, Gavin
Willey, Rt Hon Frederick


Robertson, John (Paisley)
Strauss, Rt Hon G. R.
Williams, Alan (Swansea W)


Roderick, Caerwyn
Summerskill, Hon Dr Shirley
Williams, Rt Hon Shirley (Hertford)


Rodgers, George (Chorley)
Swain, Thomas
Williams, W. T. (Warringon)


Rodgers, William (Stockton)
Taylor, Mrs Ann (Bolton W)
Wilson, Alexander (Hamilton)


Rooker, J. W.
Thomas, Dafydd (Merioneth)
Wilson, Gordon (Dundee E)


Roper, John
Thomas, Jeffrey (Abertillery)
Wilson, Rt Hon H. (Huyton)


Rose, Paul B.
Thomas, Mike (Newcastle E)
Wilson, William (Coventry SE)


Ross, Rt Hon W. (Kilmarnock)
Thomas, Ron (Bristol NW)
Wise, Mrs Audrey


Rowlands, Ted
Thompson, George
Woodall, Alec


Ryman, John
Thorne, Stan (Preston South)
Wrigglesworth, Ian


Sandelson, Neville
Tierney, Sydney
Young, David (Bolton E)


Sedgemore, Brian
Tinn, James



Selby, Harry
Tomlinson, John
TELLERS FOR THE NOES:


Shaw, Arnold (Ilford South)
Torney, Tom
Mr. James Hamilton and


Sheldon, Robert (Ashton-u-Lyne)
Urwin, T. W.
Mr. Laurie Pavitt.

Question accordingly negatived.

Amendment proposed to the proposed new Clause (n), in line 6, at end insert:

(a) by 100 per cent. if the period between the previous transfer and the death was two months or less;

(b) by 90 per cent. if that period was more than two months but not more than six months'—[Mr. Pardoe.]

Question put, That the amendment be made:—

The House divided: Ayes 263, Noes 272.

Division No. 125.]
AYES
[5.20 p.m


Adley, Robert
Cope, John
Goodhart, Philip


Aitken, Jonathan
Cormack, Patrick
Goodhew, Victor


Alison, Michael
Corrie, John
Goodlad, Alastair


Atkins, Rt Hon H. (Spelthorne)
Costain, A. P.
Gorst, John


Awdry, Daniel
Craig, Rt Hon W. (Belfast E)
Gow, Ian (Eastbourne)


Bain, Mrs Margaret
Crawford, Douglas
Gower, Sir Raymond (Barry)


Baker, Kenneth
Crouch, David
Grant, Anthony (Harrow C)


Banks, Robert
Crowder, F. P.
Gray, Hamish


Beith, A. J.
Davies, Rt Hon J. (Knutsford)
Grieve, Percy


Bell, Ronald
Dodsworth, Geoffrey
Griffiths, Eldon


Bennett, Dr Reginald (Fareham)
Douglas-Hamilton, Lord James
Grimond, Rt Hon J.


Benyon, W.
Durant, Tony
Grist, Ian


Berry, Hon Anthony
Dykes, Hugh
Grylls, Michael


Biffen, John
Eden, Rt Hon Sir John
Hall, Sir John


Biggs-Davison, John
Edwards, Nicholas (Pembroke)
Hall-Davis, A. G. F.


Blaker, Peter
Elliott, Sir William
Hamilton, Michael (Salisbury)


Bowden, A. (Brighton, Kemptown)
Emery, Peter
Hampson, Dr Keith


Boyson, Dr Rhodes (Brent)
Evans, Gwynfor (Carmarthen)
Hannam, John


Bradford, Rev Robert
Ewing, Mrs Winifred (Moray)
Harrison, Col Sir Harwood (Eye)


Braine, Sir Bernard
Eyre, Reginald
Harvie Anderson, Rt Hon Miss


Brittan, Leon
Fairbairn, Nicholas
Hastings, Stephen


Brotherton, Michael
Fairgrieve, Russell
Havers, Sir Michael


Brown, Sir Edward (Bath)
Farr, John
Hayhoe, Barney


Bryan, Sir Paul
Fell, Anthony
Henderson, Douglas


Buchanan-Smith, Alick
Finsberg, Geoffrey
Heseltine, Michael


Buck, Antony
Fisher, Sir Nigel
Hicks, Robert


Bulmer, Esmond
Fletcher, Alex (Edinburgh N)
Holland, Philip


Burden, F. A.
Fletcher-Cooke, Charles
Hooson, Emlyn


Butler, Adam (Bosworth)
Fookes, Miss Janet
Hordern, Peter


Carr, Rt Hon Robert
Fowler, Norman (Sutton C'f'd)
Howe, Rt Hon Sir Geoffrey


Chalker, Mrs Lynda
Fraser, Rt Hon H. (Stafford &amp; St)
Howell, David (Guildford)


Churchill, W. S.
Fry, Peter
Howell, Ralph (North Norfolk)


Clark, Alan (Plymouth, Sutton)
Galbraith, Hon. T. G. D.
Howells, Geraint (Cardigan)


Clark, William (Croydon S)
Gardiner, George (Reigate)
Hunt, John


Clegg, Walter
Gardner, Edward (S Fylde)
Irving, Charles (Cheltenham)


Cockcroft, John
Gilmour, Sir John (East Fife)
James, David


Cooke, Robert (Bristol W)
Glyn, Dr Alan
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)




Jessel, Toby
Moore, John (Croydon C)
Sims, Roger


Johnson Smith, G. (E Grinstead)
More, Jasper (Ludlow)
Sinclair, Sir George


Jones, Arthur (Daventry)
Morgan-Giles, Rear-Admiral
Skeet, T. H. H.


Jopling, Michael
Morrison, Charles (Devizes)
Smith, Dudley (Warwick)


Joseph, Rt Hon Sir Keith
Morrison, Hon Peter (Chester)
Speed, Keith


Kaberry, Sir Donald
Mudd, David
Spence, John


Kellett-Bowman, Mrs Elaine
Neave, Airey
Spicer, Jim (W Dorset)


Kershaw, Anthony
Nelson, Anthony
Spicer, Michael (S Worcester)


Kilfedder, James
Neubert, Michael
Sproat, Iain


Kimball, Marcus
Newton, Tony
Stanbrook, Ivor


King, Evelyn (South Dorset)
Normanton, Tom
Stanley, John


King, Tom (Bridgwater)
Nott, John
Steel, David (Roxburgh)


Kitson, Sir Timothy
Onslow, Cranley
Steen, Anthony (Wavertree)


Knight, Mrs Jill
Oppenheim, Mrs Sally
Stewart, Donald (Western Isles)


Lamont, Norman
Osborn, John
Stewart, Ian (Hitchin)


Lane, David
Page, John (Harrow West)
Stokes, John


Langford-Holt, Sir John
Page, Rt Hon R. Graham (Crosby)
Stradling Thomas, J.


Latham, Michael (Melton)
Paisley, Rev Ian
Tapsell, Peter


Lawrence, Ivan
Pardoe, John
Taylor, R. (Croydon NW)


Lawson, Nigel
Parkinson, Cecil
Taylor, Teddy (Cathcart)


Le Marchant, Spencer
Pattie, Geoffrey
Tebbit, Norman


Lester, Jim (Beeston)
Penhaligon, David
Temple-Morris, Peter


Lewis, Kenneth (Rutland)
Percival, Ian
Thatcher, Rt Hon Margaret


Lloyd, Ian
Peyton, Rt Hon John
Thomas, Dafydd (Merioneth)


Loveridge, John
Pink, R. Bonner
Thompson, George


Luce, Richard
Powell, Rt Hon J. Enoch
Thorpe, Rt Hon Jeremy (N Devon)


MacCormick, Iain
Prior, Rt Hon James
Townsend, Cyril D.


McCrindle, Robert
Pym, Rt Hon Francis
Trotter, Neville


McCusker, H.
Raison, Timothy
Tugendhat, Christopher


Macfarlane, Neil
Rathbone, Tim
van Straubenzee, W. R.


MacGregor, John
Rawlinson, Rt Hon Sir Peter
Vaughan, Dr. Gerard


Macmillan, Rt Hon M. (Farnham)
Rees, Peter (Dover &amp; Deal)
Viggers, Peter


McNair-Wilson, M. (Newbury)
Rees-Davies, W. R.
Wakeham, John


McNair-Wilson, P. (New Forest)
Reid, George
Walker, Rt Hon P. (Worcester)


Madel, David
Renton, Tim (Mid-Sussex)
Walters, Dennis


Marshall, Michael (Arundel)
Rhys Williams, Sir Brandon
Warren, Kenneth


Marten, Neil
Ridley, Hon Nicholas
Watt, Hamish


Mates, Michael
Ridsdale, Julian
Weatherill, Bernard


Mather, Carol
Rifkind, Malcolm
Wells, John


Maude, Angus
Rippon, Rt Hon Geoffrey
Welsh, Andrew


Maudling, Rt Hon Reginald
Roberts, Michael (Cardiff NW)
Whitelaw, Rt Hon William


Mawby, Ray
Roberts, Wyn (Conway)
Wiggin, Jerry


Maxwell-Hyslop, Robin
Ross, William (Londonderry)
Wigley, Dafydd


Mayhew, Patrick
Rossi, Hugh (Hornsey)
Wilson, Gordon (Dundee E)


Meyer, Sir Anthony
Rost, Peter (SE Derbyshire)
Winterton, Nicholas


Mills, Peter
Sainsbury, Tim
Wood, Rt Hon Richard


Miscampbell, Norman
St. John-Stevas, Norman
Young, Sir G. (Ealing, Acton


Mitchell, David (Basingstoke)
Shaw, Giles (Pudsey)
Younger, Hon George


Moate, Roger
Shaw, Michael (Scarborough)



Molyneaux, James
Shelton, William (Streatham)
TELLERS FOR THE AYES:


Monro, Hector
Shepherd, Colin
Mr. Cyril Smith and


Montgomery, Fergus
Silvester, Fred
Mr. Richard Wainwright.




NOES


Abse, Leo
Campbell, Ian
Delargy, Hugh


Allaun, Frank
Canavan, Dennis
Dempsey, James


Archer, Peter
Carmichael, Neil
Doig, Peter


Armstrong, Ernest
Carter, Ray
Dormand, J. D.


Ashley, Jack
Carter-Jones, Lewis
Douglas-Mann, Bruce


Ashton, Joe
Castle, Rt Hon Barbara
Duffy, A. E. P.


Atkins, Ronald (Preston N)
Clemitson, Ivor
Dunn, James A.


Atkinson, Norman
Cocks, Michael (Bristol S)
Dunnett, Jack


Bagier, Gordon A. T.
Cohen, Stanley
Dunwoody, Mrs Gwyneth


Barnett, Guy (Greenwich)
Coleman, Donald
Eadie, Alex


Barnett, Rt Hon Joel
Colquhoun, Mrs Maureen
Edelman, Maurice


Bates, Alf
Concannon, J. D.
Edge, Geoff


Bean, R. E.
Conlan, Bernard
Edwards, Robert (Wolv SE)


Bern, Rt Hon Anthony Wedgwood
Cook, Robin F. (Edin C)
Ellis, Tom (Wrexham)


Bennett, Andrew (Stockport N)
Corbett, Robin
English, Michael


Bidwell, Sydney
Cox, Thomas (Tooting)
Ennals, David


Blenkinsop, Arthur
Craigen, J. M. (Maryhill)
Evans, Ioan (Aberdare)


Boardman, H.
Crosland, Rt Hon Anthony
Evans, John (Newton)


Booth, Albert
Cunningham, G. (Islington S)
Ewing, Harry (Stirling)


Boothroyd, Miss Betty
Cunningham, Dr J. (Witeh)
Fernyhough, Rt Hon E.


Bottomley, Rt Hon Arthur
Dalyell, Tam
Fitt, Gerard (Belfast W)


Boyden, James (Bish Auck)
Davidson, Arthur
Flannery, Martin


Bradley, Tom
Davies, Bryan (Enfield N)
Fletcher, Ted (Darlington)


Bray, Dr Jeremy
Davies, Denzil (Llanelli)
Foot, Rt Hon Michael


Brown, Hugh D. (Provan)
Davies, Ifor (Gower)
Ford, Ben


Brown, Robert C. (Newcastle W)
Davis, Clinton (Hackney C)
Forrester, John


Buchan, Norman
Deakins, Eric
Fowler, Gerald (The Wrekin)


Butler, Mrs Joyce (Wood Green)
Dean, Joseph (Leeds West)
Fraser John (Lambeth, N'w'd)


Callaghan, Jim (Middleton &amp; P)
de Freitas, Rt Hon Sir Geoffrey
Garrett, John (Norwich S)







Garrett, W. E. (Wallsend)
McElhone, Frank
Rowlands, Ted


Gilbert, Dr John
MacFarquhar, Roderick
Ryman, John


Ginsburg, David
Mackenzie, Gregor
Sandelson, Neville


Golding, John
Mackintosh, John P.
Sedgemore, Brian


Gould, Bryan
Maclennan, Robert
Selby, Harry


Gourlay, Harry
McMillan, Tom (Glasgow C)
Shaw, Arnold (Ilford South)


Graham, Ted
McNamara, Kevin
Sheldon, Robert (Ashton-u-Lyne)


Grant, John (Islington C)
Madden, Max
Shore, Rt Hon Peter


Grocott, Bruce
Magee, Bryan
Short, Rt Hon E. (Newcastle C)


Hamilton, James (Bothwell)
Mahon, Simon
Short, Mrs Renée (Wolv NE)


Hamilton, W. W. (Central Fife)
Marks, Kenneth
Silkin, Rt Hon John (Deptford)


Hamling, William
Marquand, David
Silkin, Rt Hon S. C. (Dulwich)


Hardy, Peter
Marshall, Dr Edmund (Goole)
Sillars, James


Harper, Joseph
Marshall, Jim (Leicester S)
Silverman, Julius


Harrison, Walter (Wakefield)
Mason, Rt Hon Roy
Skinner, Dennis


Hart, Rt Hon Judith
Meacher, Michael
Small, William


Hatton, Frank
Mellish, Rt Hon Robert
Smith, John (N Lanarkshire)


Hayman, Mrs Helene
Mikardo, Ian
Snape, Peter


Healey, Rt Hon Denis
Millan, Bruce
Spearing, Nigel


Heffer, Eric S.
Miller, Dr M. S. (E Kilbride)
Spriggs, Leslie


Hooley, Frank
Miller, Mrs Millie (Ilford N)
Stallard, A. W.


Horam, John
Mitchell, R. C. (Soton, Itchen)
Stewart, Rt Hon M. (Fulham)


Howell, Denis (B'ham, Sm H)
Molloy, William
Strang, Gavin


Hoyle, Doug (Nelson)
Moonman, Eric
Strauss, Rt Hon G. R.


Huckfield, Les
Morris, Alfred (Wythenshawe)
Summerskill, Hon Dr Shirley


Hughes, Rt Hon C. (Anglesey)
Morris, Charles R. (Openshaw)
Swain, Thomas


Hughes, Mark (Durham)
Mulley, Rt Hon Frederick
Taylor, Mrs Ann (Bolton W)


Hughes, Robert (Aberdeen N)
Murray, Rt Hon Ronald King
Thomas, Jeffrey (Abertillery)


Hughes, Roy (Newport)
Newens, Stanley
Thomas, Mike (Newcastle E)


Hunter, Adam
Noble, Mike
Thomas, Ron (Bristol NW)


Irving, Rt Hon S. (Dartford)
Oakes, Gordon
Thorne, Stan (Preston South)


Jackson, Colin (Brighouse)
Ogden, Eric
Tierney, Sydney


Jackson, Miss Margaret (Lincoln)
O'Halloran, Michael
Tinn, James


Janner, Greville
Orbach, Maurice
Tomlinson, John


Jay, Rt Hon Douglas
Ovenden, John
Torney, Tom


Jeger, Mrs Lena
Owen, Dr David
Urwin, T. W.


Jenkins, Hugh (Putney)
Padley, Walter
Wainwright, Edwin (Dearne V)


Jenkins, Rt Hon Roy (Stechford)
Palmer, Arthur
Walden, Brian (B'ham, L'dyw'd)


John, Brynmor
Park, George
Walker, Harold (Doncaster)


Johnson, James (Hull West)
Parker, John
Walker, Terry (Kingswood)


Johnson, Walter (Derby S)
Parry, Robert
Ward, Michael


Jones, Alec (Rhondda)
Pavitt, Laurie
Watkins, David


Jones, Barry (East Flint)
Peart, Rt Hon Fred
Watkinson, John


Jones, Dan (Burnley)
Pendry, Tom
Weitzman, David


Judd, Frank
Perry, Ernest
Wellbeloved, James


Kaufman, Gerald
Phipps, Dr Colin
White, Frank R. (Bury)


Kelley, Richard
Prentice, Rt Hon Reg
White, James (Pollok)


Kerr, Russell
Prescott, John
Whitehead, Phillip


Kilroy-Silk, Robert
Price, C. (Lewisham W)
Whitlock, William


Kinnock, Neil
Price, William (Rugby)
Willey, Rt Hon Frederick


Lambie, David
Radice, Giles
Williams, Rt Hon Shirley (Hertford)


Lamborn, Harry
Rees, Rt Hon Merlyn (Leeds S)
Williams, W. T. (Warringon)


Lamond, James
Richardson, Miss Jo
Wilson, Alexander (Hamilton)


Latham, Arthur (Paddington)
Roberts, Albert (Normanton)
Wilson, Rt Hon H. (Huyton)


Leadbitter, Ted
Roberts, Gwilym (Cannock)
Wilson, William (Coventry SE)


Lever, Rt Hon Harold
Robertson, John (Paisley)
Wise, Mrs Audrey


Lewis, Ron (Carlisle)
Roderick, Caerwyn
Woodall, Alec


Lipton, Marcus
Rodgers, George (Chorley)
Wrigglesworth, Ian


Loyden, Eddie
Rodgers, William (Stockton)
Young, David (Bolton E)


Luard, Evan
Rooker, J. W.



Lyon, Alexander (York)
Roper, John
TELLERS FOR THE NOES:


Lyons, Edward (Bradford W)
Rose, Paul B.
Mr. David Stoddart and


McCartney, Hugh
Ross, Rt Hon W. (Kilmarnock)
Mr. John Ellis.

Question accordingly negatived.


Clause added to the Bill.

New Clause 6

CONDITIONAL EXEMPTION FOR CERTAIN BUILDINGS ETC. ON DEATH

'(1) Where any of the following property was included in the estate of a person immediately before his death, that is to say—



(a) land which in the opinion of the Treasury is of outstanding scenic or historic or scientific interest;


5
(b) a building for the preservation of which special steps should in the opinion of the Treasury be taken by reason of its outstanding historic or architectural interest;

5.30 p.m.

Mr. Joel Barnett: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: We are to take with this the amendments to the new clause.

Mr. Barnett: The clause stems from an undertaking which I gave in Committee. Paragraph 11 of Schedule 6 exempts gifts of national heritage property which are made to non-profit-making bodies. The clause offers similar relief for national heritage property in private hands. The intention is to avoid liability of national heritage properties until a decision is taken in the light of the report of the Select Committee on the Wealth Tax. We intend to have a fresh look at the whole question of lifetime transfers, but there should not be cause for concern because there is no need to make transfers for lifetime in the interim period, and in the event of tragic accident or death there would be no liability to capital transfer tax.

Mr. Peter Hordern: The right hon. Gentleman will, I know, wish to deal with one important matter which came up in Committee; that is to say, chattels of historic value held not by individuals but by discretionary trusts. I understand from what the right hon. Gentleman said that those objects will be caught by the tax if they are held in discretionary trusts for the 10-year period or if they are passed on in any way. I hope that the Chief Secretary will deal with this matter, as he gave in Committee what I took to be an undertaking.

Mr. Barnett: I am obliged to the hon. Gentleman. I was saying that the intention is to avoid liability of national heritage properties until a decision is taken in the light of the report of the Select Committee. Effectively, until that report is received and we have made further decisions, there will be no need for capital transfer tax to arise on national heritage properties. As we made clear in Committee, it is our intention to try to preserve as far as possible national heritage properties.
For the benefit of the House I will give a brief summary of what we are doing in the clause and the extent to which it differs from what some hon. Gentlemen

might prefer. There are three basic differences from the relief under paragraph 11 of Schedule 6, which allows the exemption for gifts to non-profit-making bodies.
The first is that in paragraph 11 the cost of preserving buildings of aesthetic interest is allowed. The second is that the land adjoining the building has been more closely defined than in paragraph 11. It must be land which is essential for the protection of the character and the amenities of the building. I do not think that the House will find that unreasonable. The third is that the chattels need not necessarily be first-class works of art but must be historically associated with the building. Again, I hope that will be acceptable to the House.
We come to how one decides whether a property should qualify. I give the House the assurance that the Treasury will consult other Departments and outside bodies to make absolutely certain that all historic houses and properties which should be included are included as recommended by the appropriate bodies. I hope that that will be acceptable to the House.
I turn to the question of upkeep and maintenance to which we referred in Committee. It is possible that there may have been a misunderstanding, and to the extent that it may have been my fault I apologise to the House and to the hon. Members for Horsham and Crawley (Mr. Hordern) and Cirencester and Tewkesbury (Mr. Ridley). In discussions upstairs my specific commitment in the early hours of one morning related to maintenance funds and arose when we were debating paragraph 11(2)(e), which refers to non-profit-making bodies. Because of the procedural arrangements, we debated Schedule 6 before debating Schedule 4 and Clause 29, on which we discussed the matter again later.
When we debated the matter at the Seventh Sitting—which was the same day as the day on which we finished the Sixth Sitting—the hon. Member for Cirencester and Tewkesbury said:
Then there is the more remote and, I agree, more difficult question of land which might have been an endowment for the house. If extra land or even other assets are exempted, that will provide the money for the upkeep of the house. Clearly, no one can keep up a house of the character of which we are speaking on one acre.


I put those three possibilities for inclusion among the assets which could be exempted while waiting for Godot.
I replied to that by saying:
The hon. Member for Cirencester and Tewkesbury mentioned other assets. The problem here—indeed, this is what one hopes for from a Select Committee—is defining other assets, and that might be a little difficult.
That is the problem. Later, on Clause 29, it is possible that I might have misled the Committee when I was thinking in terms of Schedule 11, on which I had given a commitment earlier that morning. I may have given the impression that I would put down an amendment relating to the more general aspect of historic houses, and I would not want the House to have that impression.

Mr. Robert Cooke: A little later on the right hon. Gentleman said:
anything required for the upkeep of any particular national heritage would be covered and would be exempt."—[Official Report, Standing Committee A, 6th February 1975; c. 1095–7.]
Those are the words upon which our hopes depend, and I am sure that the right hon. Gentleman will not mind my reminding him of them. Perhaps he will explain what he will not carry into action, or give us some hope of action in the future.

Mr. Barnett: I am disappointed in the hon. Gentleman. I know that he sat through the night to listen to what I had to say, and I am always grateful to anyone who does that, apart from members of the Committee who had to—other than those who went into another room for a sleep. [Interruption.] I agree that the Liberal Member never stayed. He told us that he turned into a pumpkin at 12 o'clock.
I fairly told the House that I may inadvertently have misled the Committee. As is clear to anyone who reads the Official Report or who listened to what I said, I was referring to the other schedule which relates to public bodies. I will come in a moment to whether we can give relief for the maintenance of transfers in private hands.
The treatment that we offer in the clause is not unreasonable. I know that the hon. Member for Bristol, West (Mr. Cooke) is not a churlish man. He has been generous in praising what we have done in the clause, and I am obliged to

him. It is a change for someone to say something nice about us, and I appreciate it.
On the question whether we should go further and give additional relief for funds to maintain a historic house in the hands of a private owner, that is an important matter about which I know that some of my hon. Friends are also concerned. There is a major difference between a public body and a house of this kind in private hands. What would be the size of the fund which could be set aside? How would we define an endowment or settle an amount for these purposes?
I hope to deal with the amendments taken with this clause when I have heard what hon. Gentlemen have to say about them. At present the amendments go very wide on this point and I certainly could not agree to accept them.
As I said in Committee, I recognise the problem. Having given relief under this clause we have no wish to see historic houses destroyed. That is not our intention. The very nature of the new clause makes that clear. However, to allow an unspecified sum for the maintenance of those houses as opposed to the maintenance of any other house would be going much too far. We have been quite generous in this clause. We have no desire to harm the national heritage.
I shall be happy to look again to see whether we can do anything about maintenance. At present I hope that the House feels that we have gone a long way towards meeting the problem, perhaps further than hon. Members have asked.

Mr. Robert Cooke: I hope that the right hon. Gentleman does not find me in any way churlish if I return to the matter on which we have just exchanged views. All those who have been campaigning throughout these long tedious months are grateful to the Government for putting down new Clause 6. The right hon. Gentleman said that there is no need to bother about lifetime gifts. He might like to think about the case where an ageing owner, perhaps approaching senility, wants to hand over his property to an heir who is in the prime of life. If we enact the Bill as it stands, the ageing owner will have to keep the property until he dies because it would not be convenient to hand it over in life.
We are not ungrateful. This proposal is the result of months of work by many interests outside this House and by many hon. Members. I hope that no one is against us in what we are trying to do, although not all hon. Members are yet prepared to take all the positive action required.
There is one glaring omission in new Clause 6. I turn to the question of resources. We have dealt with historic houses, gardens, contents, and amenity lands protected from the effects of the capital transfer tax in exchange for reasonable public access. It is difficult to see how these places can be maintained for reasonable public access without maintaining resources. It is not to put any class of owner in a specially privileged position. It is so that these houses can be maintained and enhanced in the future and enjoyed by a wider public.
5.45 p.m.
We accept the right hon. Gentleman's explanation that he meant to refer to something different. When he replies to the debate I hope he will make it clear that the Government realise that these places we all seek to protect cannot be kept going without resources. Are the house and the amenity land to be protected in isolation? Can we envisage a situation in which places like Chatsworth or Blenheim Palace are protected from capital transfer tax and perhaps from the wealth tax but in which the great estates which support these houses are gradually chipped away because of CTT and the wealth tax? I do not believe that the Government want that to happen.
Perhaps they could send a message to the Select Committee examining the wealth tax asking it to bear in mind the need to protect these vitally necessary resources. I am member of that Select Committee and we meet in public. It is no secret to say that there have been massive representations on this matter as it affects the national heritage, just as there were on the capital transfer tax.
I want to leave the right hon. Gentleman in no doubt that, although there are Labour Members who support us, the Opposition are absolutely solid in believing that the Government must protect resources so that private owners can continue to operate for a public purpose. We

seek to give resources to private owners so that these houses can continue to be enjoyed by a wider public and so that more property is available to be enjoyed.
If the right hon. Gentleman is in doubt about how the amount should be specified, let him take note of the case of Heveningham, now costing the taxpayer £30,000 a year, and increasing, because the resources for historic houses have been withdrawn.
I hope I have said enough to convince the right hon. Gentleman that, although he is not prepared to go all the way today, this is a matter to which we shall wish to return in the near future.

Mr. G. R. Strauss: I thank the Chief Secretary, the Chancellor and all Ministers responsible for meeting the case which some of us put forward at an early stage. I have never had any doubt that they were all sympathetic to our objective and anxious to do nothing to destroy our national heritage or anything which might endanger the continued existence of historic houses. When we put forward our case none of us had any doubt but that the Government would go as far as possible to meet our request. They have gone a long way towards it. Everyone interested in the preservation of our national heritage must be grateful to the Government.
The problem of exempting properties whose revenue is essential for their upkeep was mentioned by the hon. Member for Bristol, West (Mr. Cooke) and is elaborated in an amendment which I hope to move. The Chief Secretary has said that it is exceedingly difficult to define which properties should be exempt from capital transfer tax. We could make the exemption too wide, which would make it ridiculous, or too narrow, which would be useless. For this reason those societies and those hon. Members who are interested in the preservation of our national heritage have not attempted themselves to put forward detailed proposals as to the properties which should be exempt.
I do not blame the Chief Secretary for not going into detail now or saying that he will exempt this, that or the other property. However, I ask him to appreciate that this debate throws up a real problem. It is no use preserving buildings of national interest for cultural


or historic reasons unless funds are available for their upkeep. Unless some action is taken on the lines set out in the amendment, some of these buildings will not be kept up and their contents will be sold or will decay. They will certainly be lost to the public and the public will no longer be able to visit these houses and enjoy their contents.
I ask no more of the Chief Secretary than that he should look at the problem again to see whether there is any way of defining such properties as exempt, and whether they could be put into categories, making such restrictions as he feels fit. Surely there is some way of tackling this problem, and I hope that that way will be found. We suggest that three months after the passage of the Bill the Government should present a statutory order setting out proposals in detail. That may or may not be a good idea. But it is important to take some sort of action soon to preserve the fine buildings in various parts of the country which may otherwise be lost to the public.
I beg the Government not to say "No, this cannot be done. It is too difficult." I hope that they will not take the view that no practical definition is possible. I hope they will decide that something must be done.
I thank my right hon. Friend the Chief Secretary sincerely for his sympathy and interest and for tabling the new clause. It is nearly perfect—and it would be quite perfect if he were to accept the spirit of our amendments.

Mr. Hordern: I join the right hon. Member for Vauxhall (Mr. Strauss) in thanking the right hon. Gentleman the Chief Secretary for making a determined effort to put articles of historic national importance outside the capital transfer tax provisions. I wish to draw the attention of the right hon. Gentleman to some remarks in Committee; I know that he is anxious to help and to achieve certain objectives.
The Chief Secretary said on 5th February:
I shall be happy to look at that. I have no wish, and neither has the Chancellor, to leave any threat to the national heritage, in which I include historic houses.

When the endowment issue was raised, he said:
The second point is that the amendments would widen the scheme of the exemption provided by the paragraph so as to provide exemption for property given as a source of income for the upkeep."—[Official Report, Standing Committee A, 5th February 1975; cc. 991–4.]
Again I see no objection to that relatively minor extension.
I am sure that the Chief Secretary accepts the point made by my hon. Friend the Member for Bristol, West (Mr. Cooke) that it is not possible to keep these buildings unless some form of endowment is allowed as well. I do not know what is the best way to secure this end. I only know what will be the consequences if some form of endowment is not allowed. I am sure that the Chief Secretary is conscious that, whatever the form is, we all agree that some form of allowance must be made for the owners of historic properties to enable the proper upkeep of goods and chattels of national importance.
I wish to refer to objects of national interest and chattels of national importance held in discretionary trusts. I know that the Chief Secretary has tried to deal with the point and has given an undertaking to return to this matter. He emphasised that articles now held in discretionary trusts need not be put at risk because the Government will be entering into detailed considerations. However, the matter is not quite like that. The situation in respect of objects so held in discretionary trusts, and as it affects those who are in the position of trustees, is that, while the 10-year rule is no longer a threat, what the trustees have to advise upon is a scale under which objects will be subject to a charge of 10 per cent. if action is taken in the first year. That charge will rise in future years.
This is an unsatisfactory situation because the trustees will be in no position to advise those who are beneficiaries of these trusts or who would qualify in every other way on how best to proceed. This will not happen unless a clear undertaking is given by the Government, and particularly by the Chief Secretary, that if objects of great national importance are held in discretionary trusts the Government will see to it that they are exempted from the charge. Unless they


have such an assurance it will be impossible for trustees to give proper advice or take proper action.
This is no small matter. The objectives are clear. If objects and chattels are owned by private individuals they are now exempt; but many objects, such as pictures, worth hundreds of thousands of pounds in buildings open for viewing by the public are now, as the situation stands, under considerable threat. It may well be the trustees' duty to look at the position as it is and to suggest that pictures of real national need, and indeed of world-wide interest, should be disposed of rather than held in discretionary trust. This is an important matter, and I believe that the Chief Secretary should give a clear undertaking that all such objects—objects which are plainly of national importance and interest, whether held privately or in discretionary trusts—should be exempt, whatever arrangements the Government may bring forward later.

Mr. John Parker: I wish to declare interests as a member of the Historic Building Council and as a member of the Executive of the National Trust. We have in the United Kingdom a national heritage equal to that anywhere in the world, and certainly in Europe. Therefore, everything should be done to preserve that heritage.
Before I turn to the subject of historic houses, which is the nub of this debate, I wish to make clear that the public do not fully understand that the Historic Buildings Council and the National Trust are not interested only in the highlights such as Chatsworth. The National Trust owns enormous properties in the Lake District and around our coasts, much of which brings in little revenue. It owns many woodlands, especially in the Lake District, of a deciduous character and maintained for amenity purposes at great expense. The work of the Historic Buildings Council is increasingly moving into the core of historic towns, such as Bath and Chester, and of conservation areas, many of which are in the old industrial towns such as Newcastle, where a great deal has been done to stir up public interest, through both individuals and local authorities in seeking to make the best of our heritage in those areas. I appreciate the fact that the Govern-

ment have increased the grant to the council to enable it to extend its work especially in this sphere.
I should like to inquire of my right hon. Friend the Chief Secretary what he believes should be done to preserve our heritage. In one respect we are lucky, since, apart from German bombing during the war, the main damage inflicted on our historic heritage has been that brought about by the activities of developers in pulling down buildings, the attraction of which they do not appreciate. However, at least we have not had battles since the Civil War in our countryside which have destroyed our buildings. That is one great point of advantage we have in attracting tourists to come to the United Kingdom to see some of the best things we have to show. We should remember that fact when considering the award of grants to enable our national heritage to be cared for.
6.0 p.m.
The National Trust owns many historic houses. That causes great problems. The National Trust cannot accept a house unless there is an endowment to go with it. Some of its properties were accepted without adequate endowments and became a charge on the general funds, which again presents a problem. In the past the Government have tried to unload on the National Trust a number of properties which came their way. The Government suggested, and almost insisted, that the Historic Buildings Council should give grants to the National Trust to maintain buildings such as Hardwick. That has not always worked out well financially. The National Trust is not keen to accept further properties passed to it by the Government even if grants are awarded for their upkeep. That is not a satisfactory way of trying to deal with part of our national heritage.
In the main, the Department of the Environment looks after buildings such as castles which are ruins. It maintains buildings of national importance, such as Hampton Court. An interesting exception is provided by the house at Audley End, which I visited in 1947 when it first came into the hands of the Government to be looked after. That building was then in very bad condition. However, I must give credit where it is due since that is now a fine example of a house


which has been well preserved and maintained. However, it has been very expensive for the Treasury to do that over the years.
We have a similar problem as regards Heveringham, which was taken over prior to 1970 when the Labour Government were in office, to prevent its being pulled down because it was in danger. Ever since then the Treasury has tried to get rid of it. However, it still has to maintain that house.
If houses are to be preserved and maintained by private owners and opened to the public for the benefit of the nation, we must look at the problem of finance. Do the Government wish to give large subsidies to maintain such houses? I would have thought, given the present financial circumstances, that no Government could recommend a policy of that kind. I suggest, therefore, that the most economic way of preserving our national heritage is to make suitable financial arrangements for the maintenance of such houses. I do not suggest that undue privileges should be granted to owners. I suggest that there must be an adequate endowment for the maintenance of the house, which may partly come from fees charged to visitors. We know that such fees will go only a small way towards meeting the cost of the upkeep and running of a country house, although that may be a fact to take into consideration. I suggest that there must be an adequate endowment to go with a house which is worth preserving, if it is to be preserved in the most economic way for the benefit of the nation.
There is a need to establish a body to vet applications from persons for special endowments for the preservation of their houses. What better body can there be than the Historic Buildings Council to do that job? Its present job is to vet applications made for grants for the maintenance of houses. I think that is the right body for the Treasury to use if endowments are to be made for the preservation of houses.
The present legislation governing the Historic Buildings Council is aimed at the idea of people putting up some of the money themselves, with the Historic Buildings Council, by means of Government grants, putting up the other part of the money. Frequently 50 per cent. comes

from a local authority owning such a house or from a private owner. A problem arises if no one has the money to put up to preserve that house, since the house then tends to become a ruin. As a nation we must face up to that problem. It is impossible for local authorities to take over such houses. Given the present rating system, which local authority will do so?
Another problem is: what shall be done about historic houses whose owners have no money to put towards preservation? The Historic Buildings Council cannot pay 100 per cent. of the costs in a great many cases, although it may pay more than 50 per cent.
I request the Financial Secretary to say what the Government feel is the most economic way of maintaining those houses which are worth preserving. Will he consider referring the problem to the Select Committee on the wealth tax? That body could go into the matter very fully and make suggestions. The problem must be faced. We cannot just leave it on one side.

Mr. W. R. Rees-Davies: The Opposition congratulate the members of the Standing Committee and my hon. Friend the Member for Bristol, West (Mr. Cooke) and those outside the House who have been associated with the sterling efforts to persuade the Government of the real need to finish what has been started.
The speech of the hon. Member for Dagenham (Mr. Parker) showed experience and knowledge of the subject, as did that of the Father of the House, the right hon. Member for Vauxhall (Mr. Strauss).
There is undoubtedly a wealth of talent on this subject in the Treasury. It is not generally recognised that the British Museum, which is so well looked after, comes under what is sometimes regarded as an ogre but which nevertheless possesses a wealth of wisdom in regard to the fine arts.
I wish to deal with the problem of the small houses which form part of our historic heritage. The large houses and grounds are clearly provided for within the terms of the clause. My hon. Friend the Member for Horsham and Crawley (Mr. Hordern) dealt with the position of the discretionary trust. From a fairly long knowledge of the background of our


smaller houses, I think that the clause will require widening and amending. Curiously enough, I think that the words appear already in another subsection.
The new clause deals not only with outstanding scenic, historic and scientific interest as regards land but also with the inclusion of land adjacent to buildings which in the opinion of the Treasury is essential for the protection of their character and amenities. However, that definition does not apply to contents. The words deal merely with an object which in the opinion of the Treasury is historically associated with the building. That is not the reality of the picture.
There are two different classes. Let us take a case such as Bleak House in Thanet. Bleak House is associated with Charles Dickens. As a house it is certainly no beauty—quite the contrary. Presumably it would come within the terms of a building of outstanding historic interest. However, the whole of its historical interest devolves around the contents. Basically they are historically associated with the house and are essential for the protection of the character and amenities of the house. Although I agree with that, I nevertheless feel that the application of some of the amendments is much too wide.
We have to ensure that the class 2 and class 3 houses of great character are maintained. There are many in my own county of Kent. They are buildings of the fifteenth, sixteenth, seventeenth and eighteenth centuries, all of which are of great interest to the public. A good example is Mereworth, which is probably one of the finest buildings of the eighteenth century. The whole essence of it is also part of its contents. Another good example is Knole, probably the greatest seventeenth-century house in England. But it would be nothing without its silver and its Venetian room. As for Bleak House, it is pointless to attempt to certify it, but it is essential that the Dickensian objects in it and the sense of Dickens are maintained. Every encouragement should be given to see that some of these houses are developed and maintained along these lines, because we want to see the public going to them.
However the problem of endowments is dealt with—and clearly everyone will

listen to the National Trust and the Historic Buildings Council on the subject—there are wealthy people who may be persuaded to maintain these places so that they can be seen by the public. Provided that they do not have to pay the capital transfer tax and provided that there is some form of definition that where the objects and chattels are in the opinion of the Treasury reasonably necessary to protect the character and amenities of a house, I am sure we can secure the protection not only of the building and grounds but also of the contents. That is not to say, of course, that they will protect everything in a house. But it is necessary to ensure that we protect the reality of the heritage, which must be viewed in a broad spectrum.
As we lawyers know, the use of the words
in the opinion of the Minister
or
in the opinion of the Treasury
does not result in the danger of that view being overruled by the courts. The test is entirely subjective and depends entirely upon that decision. In the context of this measure, that is the right approach.
A great deal of excellent work has been done along the right lines. But I join with other hon. Members in saying that this is only part of the road. I hope that the Chief Secretary will reiterate that all the matters which have been taken into account until now and all the arguments advanced today will be borne in mind when the Government consider the future work of the Select Committee on the Wealth Tax. The two must run parallel. When the Government reconsider all these problems, it is to be hoped that any further amendments that may be necessary will be forthcoming in what appears to be an almost round-the-clock succession of Finance Bills that we are likely to have. They should be just about in time for the Standing Committee on the next Finance Bill to meet the difficulties which have been put forward today.

Mr. Ted Graham: I rise to assure my right hon. Friend the Chief Secretary that in this matter at least he has friends on both sides of the House.


That is quite a change from the atmosphere in Committee upstairs and in earlier debates on Report.
Despite the genuine disappointment that has been voiced, most of it based entirely on misunderstandings, my right hon. Friend can draw a great deal of satisfaction from the fact that there is a genuine feeling that he has attempted to put into legislation what was said by the Chancellor of the Exchequer in earlier debates and by himself and his colleague upstairs and that the Bill has been improved by the addition of this clause. There are interests outside this House who recognise that, and they have asked me and others to say so.
6.15 p.m.
That does not prevent us from expressing disappointment that the clause does not fulfil all that we had hoped. I do not believe that anyone prior to looking at the clause would have quibbled with the general expressions and declarations of intent, which have been referred to in detail already. All that I wish to do in order to underline that view is to quote from a speech I made in Committee. I said:
To show my absolute confidence in the belief that the future will bring all that has been forecast by the Chancellor and the Chief Secretary, I beg to ask leave to withdraw the amendment."—[Official Report, Standing Committee A, 18th February 1975, c. 2119.]
There was a genuine feeling that what my hon. Friends had in mind would be put into legislative form.
Having heard the explanation from my right hon. Friend the Chief Secretary, however, it is clear that we have not been on the same wavelength when listening to earlier debates. That is acceptable to me, and I hope that the Chief Secretary means what he said. We are going through a number of stages. My right hon. Friend and his colleagues feel that they have gone as far as they need to go and are able to go in the circumstances. Many of us feel that it was possible to go further. But care has been taken to separate the issues of gifts on death and lifetime gifts. What is more, from the numerous allusions which have been made to the fact that the Select Committee on the Wealth Tax is sitting, there is clearly another stage in which aspects of our national heritage will be protected. I have in mind especially the need to recon-

cile the belief that it should be protected with the hope that we shall not be silly enough to say that what we wish to do is to maintain a house and its grounds but that we shall deny the wherewithal to those who wish to do it. There is a dichotomy there, and on close examination the illogicality of making such a sweeping statement and then ignoring the inevitable consequence of having to deliver the goods will be seen in good time.
I enjoyed very much a phrase used by thet hon. Member for Bristol, West (Mr. Cooke). He said that he liked the idea of private owners operating for public purposes. In the matters that we are discussing, I can see this being possible. It is obvious that there are properties, land and assets which are best owned, managed, controlled and funded publicly. But this is an area in which there is a wide range of sizes, circumstances, abilities and interests which need considering carefully.
The Bill contains a range of provisions, specifications and designations of what can and cannot be accepted as part of our national heritage. There is a wide understanding of the people who can guide the Treasury, and the Treasury has been honest enough to say that it will not be able to manage to dot every "i" and cross every "t". My hon. Friend the Member for Dagenham (Mr. Parker) mentioned the bodies which are available to assist the Treasury. They include the Society for the Protection of Ancient Buildings, the Georgian Group, the Victorian Society, the Civic Trust, the Ancient Monuments Society, the Historic Buildings Council, and the National Trust.
I want finally to say to my right hon. Friend the Chief Secretary that many people welcome the steps he has taken and believe that he is on the right lines. All of us want him to keep up the good work. We believe that he intends to be logical in the steps he takes. For us, logicality means practicality. We hope that he will listen to our arguments and welcome genuine expressions of opinion based on experience so that that which we all want will be achieved.

Miss Harvie Anderson: I am grateful for this opportunity of speaking in the debate, and I apologise to the Chief Secretary for coming in rather late.
I should declare my interest. Like the hon. Member for Dagenham (Mr. Parker), I am a member of the Historic Buildings Council for Scotland. I should like to add one or two particular points to which reference has been made by my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies).
We, too, in Scotland have many small houses. The Historic Buildings Council for Scotland runs, as does its English counterpart, on a shoe-string budget. I think that it does miraculously good work. In every case where a grant is given a considerable effort is made by the owner of the property, otherwise no grant is given. Therefore, the owner in every case is playing a part and often undertaking a lot of hard work in making available to an increasingly wide public that part of our national heritage which otherwise cannot be preserved. If we help owners by giving them public money, we must clearly make it possible for them to make their own contribution. Otherwise the whole scheme will not work.
In Scotland the vast proportion of houses that we help are extremely small. If one travels from the border at Berwick anywhere up the whole of the east coast of Scotland, one will see in every village and town tiny houses included in those we are discussing today. We welcome the clause because it goes some way towards recognising the need to pursue our efforts in this sphere, which is very wide indeed.
In contrast to our small houses—and some of our great houses are able to some extent to maintain themselves—we have in our national heritage immense problems in other directions. We have, for example, the whole new town of Edinburgh. It has been variously estimated—I do not wish to give the Chief Secretary a shock—that it would cost over £20 million simply to preserve the new town. That is a formidable task for owners, public bodies and the Treasury alike. Yet there can be little doubt that throughout the whole of Western Europe there can be no greater single heritage than that part of Edinburgh which is so costly to us.
Now I should like to turn to the exhibition which was recently held in the Victoria and Albert Museum depicting

the destruction of country houses, which is the other side of this same coin. It was tragic to look at room after room of photographs and pictures of houses already demolished and gone. Admittedly those houses were on the whole rather large, but there were many smaller ones as well.
I should also like to refer to a letter from the Chairman of the Historic Buildings Council for Scotland which covered evidence to the Select Committee on the Wealth Tax. The letter states:
The council consider that the present climate of public opinion is in favour of the preservation of historic houses, and we welcome the Government's proposals towards this being possible.
The letter contains a phrase which is important and should be remembered today. It states:
It is no good keeping these houses as State-run empty monuments or even as museums. The important thing is to enable them to be kept in living occupation.
It is that aspect that attracts the wide public that they enjoy and that we have a duty to support.

Mr. Ridley: I should like to add my thanks to the Chief Secretary for tabling the clause and also for making what I thought was a fulsome apology for any misleading of the House or the Committee which might have been inferred from his remarks at various hours early in the morning on the two occasions when this matter was debated. It was because I thought that the right hon. Gentleman was not on the same point as my hon. Friend the Member for Horsham and Crawley (Mr. Hordern) and myself that I pressed him so hard. However, I do not think he is guilty of having breached an undertaking, although there was perhaps something misleading in what he said. I am prepared to accept his words at the Dispatch Box this afternoon.
I should like to press the point, which has been the theme of the debate, that assets of some kind must be available to keep the roof on and to keep repairs to a building up to standard. In only a few cases will the receipts from visitors be enough to discharge that burden. Often major repairs to a large historic house can run into tens of thousands of pounds.
It is necessary to press this point, even before the Select Committee on the Wealth Tax has reported, because an


owner who cannot leave land or assets to support his house will clearly prefer to leave them to his heir, who will have to pay tax, or the owner will otherwise have to pay capital transfer tax. There will be no advantage in doing anything else. Therefore, it seems desirable, even at this late stage, to make provision for assets to be left for the upkeep of buildings.
Schedule 6, paragraph 11(2)(e), of the Bill refers to
property given as a source of income for the upkeep of property within any of the preceding paragraphs of this sub-paragraph".
That relates to gifts for public benefit. The Government have met the need there. If it is possible to do that for gifts for public benefit, I do not see why it is not possible to exempt such assets for historic buildings which remain in private ownership.
The hon. Member for Dagenham (Mr. Parker) will know that I was one of his predecessors on the executive of the National Trust. The problem was always getting enough out of owners to make a reasonable endowment, partly because they might not have it and partly because they would prefer to leave as much as possible to their heirs. If the Chief Secretary were to accept any of the amendments in this group, the problem would not be that too much money would be left for the upkeep of houses and there could be too little upon which to pay tax, but that too little would be left by the owners because they would want to ensure that there was something left to pass on to their heirs.
If a scheme can be designed whereby property left for the upkeep of a house is put into a fund or trust which can be used only for the upkeep of such a house, I think that the need would be met. I cannot believe that a major form of avoidance would develop, because nobody would want to give more to the upkeep of a house than he believed to be strictly necessary. Indeed, there would be no advantage in so doing, because the more a person gave in trust for the upkeep of his house the less he would have to pass to his heirs or inheritors for their enjoyment.
I therefore strongly urge the acceptance of Amendment (k). It would give the Government time to design a form of

trusteeship or holding account for any funds to be used for repairs. This would not be rushing matters. It is difficult now to devise a new form of words. However, I hope that when the Chief Secretary replies he will look favourably upon Amendment (k) or any of the other amendments which roughly meet the same need. We can lose some of our historic houses if we do not make provision now without waiting for the report of the Select Committee.

6.30 p.m.

Mr. Cormack: Like the hon. Member for Dagenham (Mr. Parker) I, too, must declare something of an interest. I have the honour to be vice-chairman of Heritage in Danger, an all-party committee which has been formed to seek to point out to the Government many of the difficulties which could arise were CTT and the wealth tax to be imposed without considerable attention being paid to this problem. I add my congratulations to those which have been offered to the Chief Secretary for the thought which has been put into the new clause and, like other hon. Members who have spoken in this brief but constructive debate, I welcome it and thank the Government for bringing it in.
However, I think that the clause will frustrate the Government's good intentions unless they listen carefully to the points that have been made during the debate, particularly about the endowment of these properties. My right hon. Friend the Member for Renfrewshire, East (Miss Harvie Anderson) referred to the remarkable exhibition at the Victoria and Albert Museum, "Destruction of Country Houses". One thing that came out clearly from the exhibition, as anybody who visited it will agree, is that inheriting a property of this sort these days is no windfall, but brings enormous problems to the owners.
I have seen an example of this in my constituency, where a marvellous house built in the eighteenth century by Soane, with a magnificent Capability Brown landscaped park, has created great problems for the owner. He is having to devote his all to keeping that house for the nation. It is not a house which is full of prime national treasures, but Staffordshire would be very much poorer without


it and it is important that it should be maintained.
The owners of these houses, as was pointed out by William Morris, who should commend himself to Labour Members, are trustees for posterity rather than owners of things of incalculable worth. One remembers Ruskin, who said he would rather live in a cottage and have Warwick Castle to be amazed at than live in Warwick Castle and have nothing to be amazed at.
This has been a constant theme of those who appreciate and feel for our national heritage. I know that this feeling is shared by the Chief Secretary, the Chancellor of the Exchequer and other Ministers on the Treasury Bench. I hope they will consider most carefully that unless there are proper funds to maintain these houses there will be one of two consequences. The owners will sell up, make themselves temporarily rich and contribute to the one-generation society which has been talked about in recent weeks and then the house will either fall down or be pulled down, as so many have, as was graphically illustrated at the Victoria and Albert Museum exhibition. Or the houses will become a charge upon public funds.
I can mention another example from my constituency. Weston Park must be known to many hon. Members. It is meticulously maintained, with many fine treasures: wonderful furniture, pictures and silver. It gives enormous pleasure not to tens of thousands but to more than 100,000 people each year. If it suddenly became a totally intolerable burden for its owner no Government could stand by and see it pulled down or closed down. Any Government, of whatever complexion, would wish that house to remain open and its treasures kept intact. It is best that it should remain open and its treasures kept intact under its present trusteeship—with no charge on public funds and no drain on local authority resources or the ratepayers—lovingly maintained, and, most important of all, kept not as a museum but as a home, with an atmosphere which no museum could ever emulate.
I hope the Chief Secretary will realise that the great houses and the small which help to make up the rich and varied fabric

of our English landscape, some of which are constantly open and receive tens of thousands of visitors every year, and some of which it is impracticable to have open in that way, are part of our history and our heritage, and that their owners must be put in a position of being able to play that public part to which my hon. Friend the Member for Bristol, West (Mr. Cooke) referred. Therefore, they must have the back-up resources, be it agriculture or forestry, which enable them to do that, and I hope the Chief Secretary will make sure that this matter is dealt with properly.
The Select Committee on the Wealth Tax, to which Heritage in Danger has made detailed submissions, is discussing these matters, but because—

Mr. Robert Cooke: We decided not to meet this week because this debate was so important, but we shall be back at work next week.

Mr. Cormack: I am grateful to my hon. Friend. That underlines the point.
So important and fundamental is this business of the national heritage, and so fundamentally does it transcend all party differences and lines, that there is no one who would wish to see these places closed and their treasures dispersed. It might be a good thing if there were a Special Select Committee on our national heritage. That might be the best way of dealing with the problem. I throw that out as a further suggestion to the Chief Secretary, and I hope that what he says today and what follows from his words will not in any way put in jeopardy this priceless part of England's history.

Mr. Jasper More: I apologise to the Chief Secretary for not being present to hear him open the debate. I congratulate my hon. Friend the Member for Bristol, West (Mr. Cooke) on the way in which he moved the amendment to the new clause. Perhaps I ought to declare an interest as the owner of a house, fortunately not an enormous one, of some architectural character built in 1742.
The alarming prospect which we face is that, increasingly, there will not be a sufficient source of income to maintain either the houses or the land which the new clause affects. The nub of the clause is to be found in subsection 2(a) and (b)


where provision is made for the maintenance, repair and preservation of properties. Some hon. Members may have read in the Press fairly recently how the estate at Chatsworth has had to cut down largely on its staff employed for the maintenance of its grounds. Anybody who has been concerned with the maintenance of house property must be aware of the appalling and continuing escalation of building costs.
What we ought to be aiming for is securing for these houses, if they really are of national importance, any endowments that can be obtained for them. I am not so optimistic as the hon. Member for Dagenham (Mr. Parker), who said that what we need is adequate endowment. I think that if any private owners are prepared to offer any endowment the offer should be grabbed, and if the Government can work out some means by which these endowments can be secured for the preservation of these properties that will be an alleviation in the long run of the demands on the national Exchequer and at the same time will help to preserve our important national heritage.

Mr. Joel Barnett: May I start by thanking hon. Members for their kind remarks to me personally. It is quite overwhelming.
I say to my hon. Friend the Member for Edmonton (Mr. Graham) that we welcome advice about our historic houses and so on. I assure him that we in the Treasury welcome advice from all quarters on all subjects, but I go on to say that we are never short of advice on all subjects.
I have always very much appreciated the sincerely-held views of all those who have spoken in this debate about our national heritage, and I want to reply to the detailed points that have been put to me. Before doing that, however, perhaps I may give the hon. Member for Horsham and Crawley (Mr. Hordern) the assurance he seeks. He asked about discretionary trusts. With regard to works of art held in discretionary trusts, we think it unlikely that any problem will arise in the next year. However, I promise the hon. Gentleman and the House that we intend to meet the point in a future Bill. It is unlikely, because of the concessions we have made under discretionary trusts, that there will be a charge

under the periodic charge for some years, at least until 1980, and long before that we shall have taken the necessary measures. I hope that that will reassure the hon. Gentleman and trustees who may be concerned.
The hon. Member for Bristol, West (Mr. Cooke) has an interest in these matters so great that he was able to stay up through the night about them. I hope he will agree, having referred to the problem of lifetime gifts and the ageing owner who would not want to hang on to them, that this is not really a problem because the owner would need to hang on to them himself for only a very short period until we have gone over the next step of the problem and had the report of the Select Committee on the Wealth Tax. We shall be considering that report and taking further action. There would be no need for that owner to dispose of the property and make himself liable for the tax.
A number of speakers have referred to some of the amendments. Amendment (r) would add to the property ranking for conditional exemption a group consisting of land, buildings and objects. Indeed, there is another amendment on the question of objects, to which the hon. and learned Member for Thanet, West (Mr. Rees-Davies) referred. This in some way relates to the whole question of the upkeep and preservation of property, to which I shall be coming shortly. However, as I think my right hon. Friend the Member for Vauxhall (Mr. Strauss) recognised, Amendment (r) would go much too wide. Incidentally, I am delighted to see the right hon Member for Renfrewshire, East (Miss Harvie Anderson) present in our discussions. She told us about the small houses in Scotland which need preserving—we all agree—and about the cost to private owners of preserving them. However, to include all objects would be to go too far. That would mean including for owners of historic private houses any object, whether or not it was in keeping with a house. I see that the hon. and learned Gentleman recognises that that would be to go much too wide.
Two of the amendments, (b) and (1) are not really necessary.

Mr. Rees-Davies: I said that I thought they were too wide and I suggested that


a reasonable criterion was that which the Treasury has already laid down—namely, that the objects should be such as are reasonably necessary, in the opinion of the Treasury, to retain the character and amenities of the building. That is, in fact, using almost the very words of the new clause. Something along those lines would be probably much narrower and much more protective of the interests that the right hon. Gentleman has in mind.

Mr. Barnett: I shall be happy to look at that matter. What is in the Bill now, however, relates to public bodies and it is a different question, as I have pointed out.
Amendment (b) seeks to make sure that land of "scientific interest" includes land of "horticultural or silvicultural interest". The answer is that it does. Therefore, the Amendments (b) and (1) are unnecessary.
The main question, as every speaker in the debate has recognised, is the problem of preservation. The crux of the problem arises very much out of the point made by my hon. Friend the Member for Dagenham (Mr. Parker). The problem of preservation and upkeep of these private houses is not altogether—indeed, not very much—a question of tax. It is a matter of financial resources for the preservation of these houses.
6.45 p.m.
We have tried to help in some ways, although not as much as many would have liked or as much as I should have liked, with grants. But as the House will know, we have some problems in relation to public expenditure. Much as I should like to increase public expenditure by increasing these grants for the preservation of historic houses and other parts of the national heritage, I am bound to look closely at any proposal for even the most valuable and helpful increase in public expenditure. The amendments go into a much narrower field and seek to give relief from capital transfer tax alone for the preservation and upkeep.
My right hon. Friend the Member for Vauxhall noted the difficulties in one of his amendments and he tried to deal with them by suggesting a statutory order to

give us time to consider the best way of dealing with the matter.
The hon. Member for Thanet, West, my hon. Friend the Member for Dagenham and the hon. Member for Staffordshire, South-West (Mr. Cormack) suggested that we should have yet another Select Committee to consider these matters. But a number of right hon. and hon. Members may not be too happy about that.
As has been said, we are taking these matters in steps. We have given the relief in this new clause which should ensure that until the next step, when we have the report of the Select Committee on the Wealth Tax, there should be no problem for virtually all the private historic houses because there will be no need to transfer them in lifetime and at death they would then be exempt. The next step will be when we have the report of the Select Committee on the Wealth Tax, and that will be the time when we shall consider what it has to say and what hon. Members have said in this debate.
I hope the House will feel that this is the best way to deal with the matter, because it is a serious problem. We must contrast the positions of an owner of an ordinary private house, perhaps a large one that is not an historic house, and the owner of an historic private house. Both have problems in maintaining their houses. Therefore, in anything we do we must be particularly fair.
The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) pointed out quite fairly that there would be no question of avoidance here. The particular owner could not leave too much because, first, he probably would not have all that much if he had been maintaining a historic house for many years and, second, he would want to leave something to his children or his wife. That may be so, but nevertheless one has to define the amount fairly closely, otherwise large sums could be left.

Mr. Robert Cooke: The right hon. Gentleman will appreciate that until he has the report from the Select Committee on the Wealth Tax and has taken action upon whatever it may suggest, whether or not he agrees about the


resources, in the meantime we could easily have a situation in which historic houses and the amenities, gardens, land and contents of the houses might be protected but the estate could be sold off and we should have another national white elephant on our hands.

Mr. Barnett: I do not see why that should be so. The owner would know that at death there would be no question of any capital transfer tax arising. He would know, as I have said, that as soon as we have the report of the Select Committee on the Wealth Tax—which I hope will not be too long delayed, although even if it is a little delayed it will not be that long in coming—we shall look at the whole question of lifetime transfers. I cannot be fairer than that. This is a reasonable approach. As one hon. Member said, let us approach it in stages and in the first instance ensure that there is no danger to historic houses in the event of a sudden and tragic death. We have done that.
I hope hon. Members will think that what we have done is the best way of approaching the matter. Our whole purpose has been constantly to ensure that the national heritage is preserved as far as possible. The problem is largely one of money and not one of tax. Generally I hope that the way in which we have approached the problem will commend itself to the House.

Mr. David Howell: The Chief Secretary will not be surprised if the House is a shade disappointed with his reply, for two reasons. First, we welcome the new clause, and our hopes were raised by words in the clause which to some extent improve the situation and in another respect reprieve those parts of our national heritage over which a shadow was cast, as it was cast over so many other parts of our life, by the tax.
Our second reason for being disappointed arises from what occurred in Standing Committee. We fully accept the Chief Secretary's explanation of his words in Committee, but my hon. Friends have pointed out one or two instances where as a result of the right hon. Gentlemen's words we might have been misled.
Before we conclude the debate it is right to go further and remind the Chief Secretary of some further exchanges in Committee. The hon. Member for Edmonton (Mr. Graham), who spoke with great authority and enthusiasm on these matters when we dealt with Schedule 4, said:
We must try to design a form of protection which will provide not only for the fabric but for its maintenance.
That was very much the point that hon. Members on both sides have made this afternoon.
The Chief Secretary replied in this way:
In looking at how to deal with it I promise the Committee that I accept what lies behind the amendment.
The right hon. Gentleman repeated himself:
In that sense, I accept what lies behind the amendment. We shall seek to incorporate all that has been said by hon. Gentlemen when we come to our conclusion on the matter."—[Official Report, Standing Committee A, 18th February 1975; cc. 2191–95.]
Many of us had the strong impression—it was more than just a hope; it was more than just hanging on to yet another of what we call the "happy to look at" undertakings which were so numerous in Standing Committee—that the matter was to be set right by appropriate amendments on Report. We have been disappointed on looking at the new clause.
The point is an essential one. It concerns, in the graphic words of my hon. Friend the Member for Bristol, West (Mr. Cooke), the question of private resources dedicated to a public purpose. It concerns support for the mansion—the great house, or whatever it is—without which, in too many countries and in too many parts of this country and neighbouring countries, the net result is that most pathetic of all sights—the great derelict house, the rotting mansion of the past, with its estate removed from it. Without private resources there is no possibility of maintaining the heritage which both sides of the House want maintained.
The Chief Secretary referred to the practical problems. Certainly there are


problems. I do not regard them as insuperable. I believe that the Historic Buildings Councils of England, Scotland and Wales and the appropriate bodies in Northern Ireland have the necessary skills to assess cases. The Chief Secretary was worried about how it would be possible to decide what income would be needed. Schedule 6, paragraph 11(3)(c) provides—this is dealing with gifts for public benefit, which is a different case—a means by which the Treasury can assess what income is needed for the upkeep of the property. Therefore, I do not think that the administrative problem is insuperable.
Although, obviously, we welcome the new clause I do not think that we have seen fulfilled this afternoon what we had a right to expect would be fulfilled. I recommend my hon. Friends that they support Amendment (k) in the names of the hon. Members for Dagenham and Edmonton and the right hon. Member for

Vauxhall (Mr. Strauss) which I shall move at the appropriate stage.

Question put and agreed to.

Clause read a Second time.

Amendment proposed to the proposed new clause: (k), in line 79, at end add:
'( ) The Treasury shall, by statutory instrument laid before Parliament within three months of the passing of this Act, make provision for leaving out of account the value of a transfer of value on death consisting of property of any description to be attached to such property as may fall in subsection (1) above to be a source of income for the upkeep of that property and transferred to the owner of that property to hold for that purpose (in this section referred to as endowment property) and for the application to such a transfer of the provisions of this section with modifications and enlargements thereto as may be appropriate'.—[Mr. David Howell.]

Question put, That the amendment be made:—

The House divided: Ayes 254, Noes 268.

Division No. 126.]
AYES
[6.56 p.m.


Adley, Robert
Edwards, Nicholas (Pembroke)
Hicks, Robert


Aitken, Jonathan
Elliott, Sir William
Holland, Philip


Alison, Michael
Evans, Gwynfor (Carmarthen)
Hooson, Emlyn


Atkins, Rt Hon H. (Spelthorne)
Ewing, Mrs Winifred (Moray)
Hordern, Peter


Awdry, Daniel
Eyre, Reginald
Howe, Rt Hn Sir Geoffrey


Bain, Mrs Margaret
Fairbairn, Nicholas
Howell, David (Guildford)


Banks, Robert
Fairgrieve, Russell
Howells, Geraint (Cardigan)


Beith, A. J.
Farr, John
Hunt, John


Bennett, Dr. Reginald (Fareham)
Fell, Anthony
Hurd, Douglas


Berry, Hon Anthony
Finsberg, Geoffrey
Irving, Charles (Cheltenham)


Biffen, John
Fletcher, Alex (Edinburgh N)
James, David


Biggs-Davison, John
Fletcher-Cooke, Charles
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)


Blaker, Peter
Fookes, Miss Janet
Jessel, Toby


Bowden, A. (Brighton, Kemptown)
Fowler, Norman (Sutton C'f'd)
Johnston, Russell (Inverness)


Boyson, Dr. Rhodes (Brent)
Fox, Marcus
Jones, Arthur (Daventry)


Bradford, Rev Robert
Fraser, Rt Hon H. (Stafford &amp; St)
Jopling, Michael


Brittan, Leon
Fry, Peter
Joseph, Rt Hon Sir Keith


Brotherton, Michael
Galbraith, Hon. T. G. D.
Kaberry, Sir Donald


Brown, Sir Edward (Bath)
Gardiner, George (Reigate)
Kellett-Bowman, Mrs Elaine


Bryan, Sir Paul
Gardner, Edward (S Fylde)
Kershaw, Anthony


Buchanan-Smith, Alick
Gilmour, Sir John (East Fife)
Kilfedder, James


Buck, Antony
Glyn, Dr Alan
Kimball, Marcus


Budgen, Nick
Goodhart, Philip
King, Evelyn (South Dorset)


Bulmer, Esmond
Goodhew, Victor
King, Tom (Bridgwater)


Burden, F. A.
Goodlad, Alastair
Knight, Mrs Jill


Butler, Adam (Bosworth)
Gorst, John
Lamont, Norman


Chalker, Mrs Lynda
Gower, Sir Raymond (Barry)
Lane, David


Churchill, W. S.
Grant, Anthony (Harrow C)
Langford-Holt, Sir John


Clark, Alan (Plymouth, Sutton)
Gray, Hamish
Latham, Michael (Melton)


Clark, William (Croydon S)
Grieve, Percy
Lawrence, Ivan


Clegg, Walter
Griffiths, Eldon
Lawson, Nigel


Cockcroft, John
Grimond, Rt Hon J.
Le Marchant, Spencer


Cooke, Robert (Bristol W)
Grist, Ian
Lester, Jim (Beeston)


Cope, John
Grylls, Michael
Lewis, Kenneth (Rutland)


Cormack, Patrick
Hall, Sir John
Lloyd, Ian


Corrie, John
Hall-Davis, A. G. F.
Loveridge, John


Costain, A. P.
Hamilton, Michael (Salisbury)
MacCormick, Iain


Craig, Rt Hon W. (Belfast E)
Hampson, Dr Keith
McCrindle, Robert


Crawford, Douglas
Hannam, John
McCusker, H.


Crouch, David
Harrison, Col Sir Harwood (Eye)
Macfarlane, Neil


Crowder, F. P.
Harvie Anderson, Rt Hon Miss
MacGregor, John


Dodsworth, Geoffrey
Hastings, Stephen
Macmillan, Rt Hon M. (Farnham)


Douglas-Hamilton, Lord James
Havers, Sir Michael
McNair-Wilson, M. (Newbury)


Durant, Tony
Hayhoe, Barney
McNair-Wilson, P. (New Forest)


Dykes, Hugh
Henderson, Douglas
Madel, David


Eden, Rt Hon Sir John
Heseltine, Michael
Marten, Neil




Mates, Michael
Pink, R. Bonner
Steel, David (Roxburgh)


Mather, Carol
Powell, Rt Hon J. Enoch
Steen, Anthony (Wavertree)


Maude, Angus
Pym, Rt Hon Francis
Stewart, Donald (Western Isles)


Maudling, Rt Hon Reginald
Raison, Timothy
Stewart, Ian (Hitchin)


Mawby, Ray
Rathbone, Tim
Stokes, John


Maxwell-Hyslop, Robin
Rawlinson, Rt Hon Sir Peter
Stradling Thomas, J.


Mayhew, Patrick
Rees, Peter (Dover &amp; Deal)
Tapsell, Peter


Meyer, Sir Anthony
Rees-Davies, W. R.
Taylor, R. (Croydon NW)


Miller, Hal (Bromsgrove)
Reid, George
Taylor, Teddy (Cathcart)


Mills, Peter
Renton, Tim (Mid-Sussex)
Tebbit, Norman


Miscampbell, Norman
Rhys Williams, Sir Brandon
Temple-Morris, Peter


Mitchell, David (Basingstoke)
Ridley, Hon Nicholas
Thatcher, Rt Hon Margaret


Moate, Roger
Ridsdale, Julian
Thomas, Dafydd (Merioneth)


Molyneaux, James
Rifkind, Malcolm
Thompson, George


Monro, Hector
Rippon, Rt Hon Geoffrey
Thorpe, Rt Hon Jeremy (N Devon)


Montgomery, Fergus
Roberts, Michael (Cardiff NW)
Townsend, Cyril D.


Moore, John (Croydon C)
Roberts, Wyn (Conway)
Trotter, Neville


More, Jasper (Ludlow)
Ross, William (Londonderry)
Tugendhat, Christopher


Morgan-Giles, Rear-Admiral
Rossi, Hugh (Hornsey)
van Straubenzee, W. R.


Morrison, Charles (Devizes)
Rost, Peter (SE Derbyshire)
Vaughan, Dr. Gerard


Morrison, Hon Peter (Chester)
Royle, Sir Anthony
Viggers, Peter


Mudd, David
Sainsbury, Tim
Wainwright, Richard (Colne V)


Neave, Airey
St. John-Stevas, Norman
Wakeham, John


Nelson, Anthony
Scott, Nicholas
Walters, Dennis


Neubert, Michael
Shaw, Giles (Pudsey)
Warren, Kenneth


Newton, Tony
Shaw, Michael (Scarborough)
Watt, Hamish


Normanton, Tom
Shelton, William (Streatham)
Weatherill, Bernard


Nott, John
Shepherd, Colin
Welsh, Andrew


Onslow, Cranley
Silvester, Fred
Whitelaw, Rt Hon William


Oppenheim, Mrs Sally
Sims, Roger
Wiggin, Jerry


Osborn, John
Sinclair, Sir George
Wigley, Dafydd


Page, John (Harrow West)
Skeet, T. H. H.
Wilson, Gordon (Dundee E)


Page, Rt Hon R. Graham (Crosby)
Smith, Cyril (Rochdale)
Winterton, Nicholas


Paisley, Rev. Ian
Speed, Keith
Wood, Rt Hon Richard


Pardoe, John
Spence, John
Young, Sir G. (Ealing, Acton)


Parkinson, Cecil
Spicer, Jim (W Dorset)
Younger, Hon George


Pattie, Geoffrey
Spicer, Michael (S Worcester)



Penhaligon, David
Stainton, Keith
TELLERS FOR THE AYES:


Percival, Ian
Stanbrook, Ivor
Mr. W. Benyon and


Peyton, Rt Hon John
Stanley, John
Mr. Richard Luce.




NOES


Abse, Leo
Corbett, Robin
Forrester, John


Allaun, Frank
Cox, Thomas (Tooting)
Fowler, Gerald (The Wrekin)


Archer, Peter
Craigen, J. M. (Maryhill)
Fraser, John (Lambeth, N'w'd)


Armstrong, Ernest
Cronin, John
Freeson, Reginald


Ashley, Jack
Crosland, Rt Hon Anthony
Garrett, John (Norwich S)


Ashton, Joe
Cryer, Bob
Garrett, W. E. (Wallsend)


Atkins, Ronald (Preston N)
Cunningham, G. (Islington S)
Gilbert, Dr John


Bagier, Gordon A. T.
Cunningham, Dr J. (Whiteh)
Ginsburg, David


Barnett, Guy (Greenwich)
Dalyell, Tam
Golding, John


Barnett, Rt Hon Joel (Heywood)
Davidson, Arthur
Gould, Bryan


Bates, Alf
Davies, Bryan (Enfield N)
Gourlay, Harry


Bean, R. E.
Davies, Denzil (Llanelli)
Graham, Ted


Benn, Rt Hon Anthony Wedgwood
Davies, Ifor (Gower)
Grant, John (Islington C)


Bennett, Andrew (Stockport N)
Davis, Clinton (Hackney C)
Grocott, Bruce


Bidwell, Sydney
Deakins, Eric
Hamilton, W. W. (Central Fife)


Blenkinsop, Arthur
Dean, Joseph (Leeds West)
Hamling, William


Boardman, H.
Delargy, Hugh
Hardy, Peter


Booth, Albert
Dempsey, James
Harper, Joseph


Bottomley, Rt Hon Arthur
Doig, Peter
Harrison, Walter (Wakefield)


Boyden, James (Bish Auck)
Dormand, J. D.
Hart, Rt Hon Judith


Bradley, Tom
Douglas-Mann, Bruce
Hattersley, Rt Hon Roy


Bray, Dr Jeremy
Duffy, A. E. P.
Hatton, Frank


Brown, Hugh D. (Provan)
Dunn, James A.
Hayman, Mrs Helene


Brown, Robert C. (Newcastle W)
Dunnett, Jack
Healey, Rt Hon Denis


Buchan, Norman
Dunwoody, Mrs Gwyneth
Heffer, Eric S.


Butler, Mrs Joyce (Wood Green)
Eadie, Alex
Hooley, Frank


Callaghan, Jim (Middleton &amp; P)
Edelman, Maurice
Horam, John


Campbell, Ian
Edge, Geoff
Howell, Denis (B'ham, Sm H)


Canavan, Dennis
Edwards, Robert (Wolv SE)
Hoyle, Doug (Nelson)


Carmichael, Neil
Ellis, Tom (Wrexham)
Huckfield, Les


Carter, Ray
English, Michael
Hughes, Rt Hon C. (Anglesey)


Carter-Jones, Lewis
Ennals, David
Hughes, Mark (Durham)


Castle, Rt Hon Barbara
Evans, Ioan (Aberdare)
Hughes, Robert (Aberdeen N)


Clemitson, Ivor
Evans, John (Newton)
Hughes, Roy (Newport)


Cocks, Michael (Bristol S)
Ewing, Harry (Stirling)
Hunter, Adam


Cohen, Stanley
Fernyhough, Rt Hon E.
Jackson, Colin (Brighouse)


Coleman, Donald
Fitt, Gerard (Belfast W)
Jackson, Miss Margaret (Lincoln)


Colquhoun, Mrs Maureen
Flannery, Martin
Janner, Greville


Concannon, J. D.
Fletcher, Ted (Darlington)
Jay, Rt Hon Douglas


Conlan, Bernard
Foot, Rt Hon Michael
Jeger, Mrs Lena


Cook, Robin F. (Edin C)
Ford, Ben
Jenkins, Hugh (Putney)







Jenkins, Rt Hon Roy (Stechford)
Moonman, Eric
Silverman, Julius


John, Brynmor
Morris, Alfred (Wythenshawe)
Skinner, Dennis


Johnson, James (Hull West)
Morris, Charles R. (Openshaw)
Small, William


Johnson, Walter (Derby S)
Murray, Rt Hon Ronald King
Smith, John (N Lanarkshire)


Jones, Alec (Rhondda)
Newens, Stanley
Snape, Peter


Jones, Barry (East Flint)
Noble, Mike
Spearing, Nigel


Jones, Dan (Burnley)
Oakes, Gordon
Spriggs, Leslie


Judd, Frank
Ogden, Eric
Stallard, A. W.


Kaufman, Gerald
O'Halloran, Michael
Stewart, Rt Hon M. (Fulham)


Kelley, Richard
Orbach, Maurice
Stoddart, David


Kerr, Russell
Orme, Rt Hon Stanley
Strang, Gavin


Kilroy-Silk, Robert
Ovenden, John
Strauss, Rt Hon G. R.


Kinnock, Neil
Owen, Dr David
Summerskill, Hon Dr Shirley


Lambie, David
Padley, Walter
Swain, Thomas


Lamborn, Harry
Palmer, Arthur
Taylor, Mrs Ann (Bolton W)


Lamond, James
Park, George
Thomas, Jeffrey (Abertiliery)


Latham, Arthur (Paddington)
Parry, Robert
Thomas, Mike (Newcastle E)


Leadbitter, Ted
Pavitt, Laurie
Thomas, Ron (Bristol NW)


Lee, John
Peart, Rt Hon Fred
Thorne, Stan (Preston South)


Lever, Rt Hon Harold
Pendry, Tom
Tierney, Sydney


Lewis, Ron (Carlisle)
Perry, Ernest
Tinn, James


Lipton, Marcus
Phipps, Dr Colin
Tomlinson, John


Litterick, Tom
Prentice, Rt Hon Reg
Torney, Tom


Lomas, Kenneth
Prescott, John
Urwin, T. W.


Lyon, Alexander (York)
Price, C. (Lewisham W)
Varley, Rt Hon Eric G.


Lyons, Edward (Bradford W)
Price, William (Rugby)
Wainwright, Edwin (Dearne V)


McCartney, Hugh
Radice, Giles
Walker, Harold (Doncaster)


McElhone, Frank
Rees, Rt Hon Merlyn (Leeds S)
Walker, Terry (Kingswood)


MacFarquhar, Roderick
Richardson, Miss Jo
Ward, Michael


Mackenzie, Gregor
Roberts, Albert (Normanton)
Watkins, David


Mackintosh, John P.
Roberts, Gwilym (Cannock)
Watkinson, John


Maclennan, Robert
Robertson, John (Paisley)
Weitzman, David


McMillan, Tom (Glasgow C)
Roderick, Caerwyn
Wellbeloved, James


McNamara, Kevin
Rodgers, George (Chorley)
White, Frank R. (Bury)


Madden, Max
Rodgers, William (Stockton)
White, James (Pollok)


Magee, Bryan
Rooker, J. W.
Whitehead, Phillip


Mahon, Simon
Roper, John
Whitlock, William


Marks, Kenneth
Rose, Paul B.
Willey, Rt Hon Frederick


Marquand, David
Ross, Rt Hon W. (Kilmarnock)
Williams, W. T. (Warrington)


Marshall, Dr Edmund (Goole)
Rowlands, Ted
Wilson, Alexander (Hamilton)


Marshall, Jim (Leicester S)
Ryman, John
Wilson, Rt Hon H. (Huyton)


Mason, Rt Hon Roy
Sandelson, Neville
Wilson, William (Coventry SE)


Meacher, Michael
Sedgemore, Brian
Wise, Mrs Audrey


Mellish, Rt Hon Robert
Seiby, Harry
Woodall, Alec


Mikardo, Ian
Shaw, Arnold (Ilford South)
Wrigglesworth, Ian


Millan, Bruce
Sheldon, Robert (Ashton-u-Lyne)
Young, David (Bolton E)


Miller, Dr M. S. (E Kilbride)
Shore, Rt Hon Peter



Miller, Mrs Millie (Ilford N)
Short, Mrs Renée (Wolv NE)
TELLERS FOR THE NOES:


Milchell, R. C. (Soton, Itchen)
Silkin, Rt Hon John (Deptford)
Mr. John Ellis and


Molloy, William
Sillars, James
Mr. James Hamilton.

Question accordingly negatived.

Clause added to the Bill.

7.0 p.m.

The Parliamentary Secretary to the Treasury (Mr. Robert Mellish): On a point of order, Mr. Speaker. I am raising no query about the Division. I am not asking that it should be taken again or anything like that. The point I wish to raise is that I understand from a number of Members on the interview

New Clause 7

DISPOSITION FOR MAINTENANCE OF FAMILY

'.—(1) A disposition is not a transfer of value if it is made by one party to a marriage in favour of the other party or of a child of either party and is—



(a) for the maintenance of the other party, or


5
(b) for the maintenance, education or training of the child for a period ending not later than the year in which he attains the age of eighteen or, after attaining that age, ceases to undergo full-time education or training.



(2) A disposition is not a transfer of value if it is made in favour of a child who is not in the care of a parent of his and is for his maintenance, education or training for a period ending not later than the year in which—


10
(a) he attains the age of 18; or

floor that the Division bells were not ringing. I wish to put it on record, so that somebody can be made aware, that the Division bells are not ringing throughout the Palace. They were not ringing on the interview floor or in other parts of the Palace. Will somebody please find out why, and do something about it?

Mr. Speaker: This is a matter which I shall certainly have investigated.

(b) after attaining that age he ceases to undergo full-time education or training; but paragraph (b) above applies only if before attaining that age the child has for substantial periods been in the care of the person making the disposition.


15
(3) A disposition is not a transfer of value if it is made in favour of a dependent relative of the person making the disposition and is a reasonable provision for his care or maintenance.


20
(4) Where a disposition satisfies the conditions of the preceding provisions of this section to a limited extent only so much of it as satisfies them and so much of it as does not satisfy them shall be treated as separate dispositions; and where a disposition satisfying those conditions is a disposal of an interest in possession in settled property, the interest shall not, by virtue of paragraph 4(1) of Schedule 5 to this Act, be treated for the purposes of that Schedule as coming to an end.



(5) In this section—


25
"child" includes a step-child and an adopted child and "parent" shall be construed accordingly;


30
"dependent relative" means, in relation to any person, a relative of his, or of his spouse, who is incapacitated by old age or infirmity from maintaining himself, or the mother of that person, or of his spouse, if the mother is widowed or living apart from her husband, or, in consequence of dissolution or annulment of marriage, a single woman;



"marriage", in relation to a disposition made on the occasion of the dissolution or annulment of a marriage, and in relation to a disposition varying a disposition so made, includes a former marriage; and



"year" means any period of twelve months ending with 5th April.'—[Mr. Healey.]

Brought up, and read the First time.

Dr. Gilbert: I beg to move, That the clause be read a Second time.

Mr. Speaker: With this we are to take New Clause 25 (Chargeable transfer of assets between relatives), and the following amendments:
No. 728, in Clause 20, page 16, line 25, at end insert:
'(4A) A disposition is not a transfer of value if it is in favour of a child of the transferor who is under the age of 16 years at the time of the disposition or, if the child is at that time over the age of 16 years, the transfer consists of, the maintenance and education of the child, while he is receiving full time instruction at any university, college, school or other educational establishment'.
(4B) Section 10 of the Taxes Act, shall apply for determining whether a child is receiving full time instruction at an educational establishment.
No. 734, in page 16, line 25, at end insert:
'(4A) A disposition is not a transfer of value if it consists of a payment to or for the benefit of a lineal descendant, brother, sister, nephew or niece of the transferor, or any such relative of the husband or wife of the transferor, who is by reason of some mental or physical disability incapable of maintaining himself and who if female, is not at the time of the disposition married'.
No. 505, in page 16, line 27, at end insert:
'and other than a transfer made by an individual to a relative of himself or his spouse or to an employee or former employee if that relative, employee or former employee is disabled or incapacitated and the transfer provides or helps to provide special care, maintenance, education, equipment or modifications

or additions to any building for the benefit of the disabled or incapacitated person'.
Government Amendments Nos. 200 and 201 and the proposed amendments to new Clause 7.

Mr. Powell: I gather that it is agreeable to you, Mr. Speaker, that we may refer to Amendment No. 779, which seeks to insert in the Sixth Schedule a paragraph entitled "Trusts for handicapped child".

Mr. Speaker: Yes, that is so.

Dr. Gilbert: New Clause 7 results from an undertaking given by my right hon. Friend the Chief Secretary in Standing Committee upstairs to consider the treatment of payments for the maintenance of dependent relatives and for the maintenance, education and training of children, including children over 18 in full-time education. Such payments are, of course, normally made out of income, and others would be covered by the £1,000 annual exemption. But we have accepted that where payments are made out of capital for these purposes it would be right to give relief.
The clause puts beyond doubt also that a disposition made on the occasion of the dissolution of a marriage will be covered by the spouse exemption. Doubt was expressed about that in Standing Committee in the debate on Amendment No. 442.
It may be for the convenience of the House if I now go briefly through the


salient provisions of the new clause. Subsection (1) exempts a disposition for the maintenance of the disponer's spouse or former spouse, and, second, for the maintenance, education or training of a child, including a step-child or adopted child, of either spouse, for a period ending not later than the year ending 5th April in which the child attains the age of 18 or ceases to undergo full-time education.
Subsection (2) exempts a disposition made for the maintenance of a child who is not in the care of either of his parents, including step-parents or persons who have adopted the child; and a disposition for maintenance in this case after the child has attained the age of 18 may qualify for the exemption, but only if before that age the child has for substantial periods been in the care of the disponer.
Subsection (3) exempts reasonable provision for the care or maintenance of a dependent relative of the disponer. What is reasonable must necessarily depend on the circumstances of the disponer and the relative and the degree of incapacity or infirmity of that relative. The term "dependent relative" is defined in subsection (5) in the same terms as those used in the Finance Act 1965, which exempts from capital gains tax a house provided rent-free for a dependent relative.
Subsection (4) accomplishes two objectives. First, it provides that a disposition which would not be exempt merely because it did not wholly satisfy the conditions of subsections (1) to (3)—that is, where, for example, a disposition for a dependent relative was more than could be considered reasonable in the circumstances—may be split into two dispositions, the part that would be treated as exempt and the part that is chargeable.
Second, subsection (4) provides that a disposition of an interest in possession in settled property which satisfies the conditions in subsections (1) to (3) is not to be chargeable by virtue of paragraph 4(1) of Schedule 5, which treats an interest in possession as coming to an end when it is disposed of.
With respect further to the provisions of subsection (4), with reference to divorce and separation settlements and variations of existing settlements, I was

pressed in Standing Committee by, I think, the hon. and learned Member for Dover and Deal (Mr. Rees) to take care of the situation where there were variations of settlements, and I undertook so to do. I hope that in this respect the new clause meets the point which the hon. and learned Gentleman made and the undertaking which I gave.
There is one basic point here which, I think, should be made for the assistance of the House. The relief provided by the new clause is in no respect less generous than that provided by paragraph 15 for settlements made on the occasion of a divorce or separation. If there are any questions relating to divorce and separation settlements, I shall gladly deal with them.

7.15 p.m.

Mr. Graham Page: Can the hon. Gentleman be a little more explicit about variation? It is difficult to follow how that would be covered by the proposed clause. If the hon. Gentleman has a little note in his brief about it, will he tell us a little more?

Dr. Gilbert: I am only too happy to oblige the right hon. Gentleman. I was seeking to make progress because I know that hon. Members are anxious to conclude this debate and move on to other things as soon as possible.
The second half of subsection (4) meets the point which the right hon. Gentleman has raised. It provides that where there is a disposal of an interest in possession which satisfies the qualifying conditions—that is to say, being in satisfaction of a claim for maintenance—there shall be no charge on the coming to an end of an interest in possession. This is linked with the definition of "marriage" in subsection (5), which makes clear that a disposal by variation of a settlement on a former spouse attracts the relief. I hope that that answers the question.
I come now to the amendments to the new clause, and I take first, Amendments (b) and (i), which I understand have basically the same effect—that is, to exempt from the tax a disposition by a person for the maintenance of his or her illegitimate child. Subsection (1) of the Government's new clause, to which Amendment (b) attaches, exempts from tax a disposition made by one party to a marriage


in favour of a child of either party. Because Amendment (b) fails to define the parties to the marriage as the mother and the reputed father, I have to advise the House that it holds no meaning as it stands.
However, with respect to Amendment (i), I take it that the right hon. and learned Member for Surrey, East (Sir G. Howe) and his hon. Friends have in mind the case where the reputed father does not wish to adopt the child or take it into his care or marry the mother but is willing to pay for the child's maintenance. Such a case is not covered by the new clause as drafted, and I am happy to tell the House that the Government are prepared to accept Amendment (i).
The set of amendments (e), (f), (h), (j), (l) and (m) would have three effects. The first would be to take out of the new clause the requirement that the provision must be reasonable and to substitute the requirement that it must be made solely for care or maintenance. If this substitution has any significant meaning at all, it would enable a very large gift to be exempted provided that it was labelled as being solely for care or maintenance, and this would be going further than I could advise my hon. Friends to go.
The second effect—this attaches also to Amendment (f)—would be to exempt a provision for the care or maintenance of a former employee. I must say that I hardly think it appropriate to lump together amendments dealing with both ex-employees and members of the family, but, however that may be, there are two points to be made. First, we have provided relief for bona fide superannuation schemes in paragraph 16 of Schedule 5. I am aware that in Standing Committee there was discussion about gifts to old family retainers which could be deemed to stand in lieu of pension plans. I undertook to look at that. I regret to have to tell the House that I am not yet in a position to put final proposals before it, but we are looking into the matter as diligently and as sympathetically as we can, and I hope to be able to come back to it before very long.
The third effect of this group of amendments would be to eliminate the requirement that the relative should be dependent—that is to say, that the relative

should be incapacitated by old age or infirmity from maintaining himself. The result would be to enable gifts to be made under the label of care or maintenance for relatives who were perfectly able-bodied or, indeed, perhaps extremely wealthy. It will come as no surprise to the Opposition to learn that this also is not a proposal which I could commend to my hon. Friends.
Amendment (g) would also widen the exemption to a great extent. In this case it would exempt dispositions for the care or maintenance of a relative residing with the disponer, again irrespective of the age, need or health of the relative. If the Opposition have in mind with this amendment the case of a child who is being brought up by a relative other than one of his parents, I can assure them that such a child, though admittedly not a dependent relative as defined under subsection (5), would be taken care of by a disposition for his maintenance which would be exempted under subsection (2).
New Clause 25 seeks to provide that the tax on any transfer of assets to a member of a transferor's family shall be reduced to 45 per cent. of the tax which would otherwise be payable on a lifetime scale, and, moreover, that it should be paid by interest-free instalments, but that the relief should cease if the transferee disposes of the assets within three years. The clause is drawn so widely that it would apply to the great majority of transfers likely to come within the charge of the capital transfer tax. A member of the transferor's family is defined as including relatives, which means ancestors, descendants, brothers, sisters, uncles, aunts, nephews and nieces of the transferor or of the transferor's spouse, and spouses and relatives. This clause could well include almost every likely beneficiary of the average donor and testator. It will come as no surprise to the Opposition that this would result in such a diminution of the charge to tax that we are not able to recommend its acceptance.
I think I have dealt with all the amendments other than that which was referred to by the right hon. Member for Down, South (Mr. Powell). I was not anticipating having to deal with that amendment at this stage, but I shall look into it while the right hon. Gentleman is


on his feet and hope to return to it if I am fortunate enough to catch your eye, Mr. Speaker, and receive the consent of the House at the end of the debate.

Mr. John Nott (St. Ives): We are naturally satisfied that the Government should have put down new Clause 7, but we feel that gratitude is not the emotion we should express because it only clarifies matters which should have been much better expressed originally. It is good to see the position over the maintenance of children and dependent relatives expressed more succinctly than was originally the case.
Anybody reading the debate on Clause 18 in Committee must be a little astonished that the legislation should ever have been presented in the form in which it originally came before the House. It took one whole sitting of the Committee to find out exactly what the clause was expressing, and now it is rather unfortunate that we should be considering the whole crucial question of family life and obligations under the pressure of the guillotine. I shall move ahead fairly quickly because we want to get on to the later debates on agriculture and small businesses, although it is entirely up to the House as to whether or not it wishes to proceed at the sort of speed I have in mind.
Those of us who did not serve on the Standing Committee have been treated with a fair amount of—perhaps "contempt" is too strong a word—disdain in the presentation of marshalled amendments. To give but one example of the problems we have faced throughout the passage of the Bill I shall refer to Amendment No. 200. It is down for debate and was published only this afternoon in marshalled form. Although the amendment was in the great sheaf of papers we received on Monday it should have been possible to have obtained Government amendments in a marshalled form more than just a few hours before we were due to debate them.
I have only two substantive points on the new clause. In spite of the remarks of the Financial Secretary, the dependent relative definition is very narrowly drawn.

Perhaps I misunderstand the wording, but the new clause says:
'dependent relative' means, in relation to any person, a relative of his, or of his spouse, who is incapacitated by old age or infirmity from maintaining himself, or the mother of that person—
I do not see why the father of that person should be excluded. Is there something special about the mother in such a case? The provision appears to apply only to the female side of the family. That may be a minor point, but it could be of great importance to a family.
The clause is generally rather narrowly drawn. We are very glad to hear that the Government will accept Amendment (i) in the names of my right hon. and hon. Friends. It deals with the case of an illegitimate child and we are grateful that the provisions can be broadened in this way.
We are grateful to hear that the Government are still considering what might be done in the case of an ex-employee of a family. That might be a nurse, who has devoted the whole of her life to looking after a disabled child, and it would seem unfortunate, in spite of the reference by the Financial Secretary to bona fide superannuation schemes, if a wealthy family—it would have to be above the threshold, but the cumulative totals would build up—were presented with a major disincentive from providing for that nurse in her retirement.
I come to new Clause 25, which is the main Opposition new clause. The Financial Secretary's answer to it was unsatisfactory. Our clause seeks to include a lower rate of capital transfer tax where a disposition is made in favour of a person's family. I accept that it may appear to go very wide, but it does no more than propose a principle which is accepted in virtually every country, and certainly a principle accepted in almost every European country that has a gifts or wealth tax.
The Select Committee on the Wealth Tax is considering in respect of the wealth tax, the question of consanguinity, but why, if the Government have an open mind on consanguinity in relation to the wealth tax, should the Financial Secretary feel that it is somehow wrong in relation to the capital transfer tax. When the


Chancellor spoke on the first new clause he made rather snide comments about gifts in consideration of a marriage, but if the right hon. Gentleman had followed his own Bill—and I regret to say that, having heard him speak several times, I feel he has not followed it closely—he would have found the principle of consanguinity already contained in the legislation.
7.30 p.m.
I have had great difficulty ploughing my way through the amendments, because I did not serve on the Standing Committee. Under paragraph 5(1)(a) of Schedule 6 an outright gift to a remoter descendant of the transferor is exempt up to £2,500. If somebody who is not connected directly with a family gives a gift in consideration of marriage, the sum of £2,500, as opposed to the normal £1,000, is exempt for the purposes of the capital transfer tax. The Government have on the Notice Paper another amendment which has not yet been marshalled. It is extraordinarily difficult for us to follow the point when we do not have marshalled amendments. A Government amendment which appeared in the blue Notice Paper of 25th February said that if a parent makes a gift in consideration of marriage to one of his children the exemption is £5,000.
Therefore, it appears that the principle of consanguinity, the principle that the rate of tax should be lower where dispositions are made in favour of both relatives has already been accepted by the Government. We are seeking an extension of this in new Clause 25.
The Green Paper on the inheritance tax published by the Conservative adminitration in March 1972 pointed out—and I have no reason to believe that the rates have changed—that the maximum rate on bequests and gifts to surviving spouses and direct dependants was 20 per cent. in France and 15 per cent. in Germany. In Germany the top rate and in France the flat rate on bequests to strangers is 60 per cent. France and Germany are examples of countries where gifts made to close relatives and to members of the family are on a far lower rate than gifts made outside the family.
We should certainly wish the Government to consider the whole principle of a lower rate of capital transfer tax for

dispositions within a family than is enshrined in the Bill. The rates of tax are the most pernicious aspects of this measure. They will destroy the family farms and businesses. Coupled with capital gains tax, they have led to the Bill being referred to as a geriatric charter.
If it were possible to include generous reductions for transfers within a family on exactly the same principle as applies in almost every country of the world with the exception of Sri Lanka—that is the only country we have been able to discover that does not have a lower rate for gift-passing within a family—much of the Opposition's criticism of the whole measure would be mitigated.
I shall have to ask my right hon. and hon. Friends to divide on new Clause 25 if we cannot get a better answer from the Financial Secretary on the whole principle of dispositions within a family. I accept that possibly it is slightly too widely drafted and needs to be looked at in more depth. If the Financial Secretary were to give an undertaking now that he will enshrine in the forthcoming Finance Bill the principle of consanguinity, we should probably be able to leave the matter there. Short of any such undertaking I must ask my right hon. and hon. Friends to divide on new Clause 25.
That is all I wish to say now. If any hon. Members wish to raise other points, I may ask the leave of the House to reply, very briefly.

Mr. Powell: I was grateful to the Financial Secretary for the concluding remarks of his opening speech, in which he expressed himself ready to consider the subject matter of Amendment No. 779 to Schedule 6. Nevertheless, I was rather surprised at his surprise, because when my hon. Friend the Member for Londonderry (Mr. Ross) moved an identical amendment in Committee he withdrew it after a very short debate—the report of which will be found at col. 893 and following of the Official Report of the Standing Committee proceedings—after the Chief Secretary had indicated that the point involved would be covered by what it was intended to do more largely, as I gather is now proposed to be done by the Government's new clause.
I should be grateful if the Financial Secretary could indicate in more detail


how the clause will cover the special position of a disposition made for the exclusive benefit of a handicapped child. When we envisaged the problem in Committee we were concerned with a child so severely mentally or physically handicapped that he or she would require constant care or protection.
When we look at the clause with such a child in mind, we see that it is evident that subsections (1) and (2) would not meet the case. I suppose it could be argued that under subsection (2) such a child might be under training after the age of 18, and, indeed, indefinitely, but I cannot believe that that is a satisfactory way of bringing such a child within the scope of the clause.
One is driven forward to subsection (3) concerning a disposition in favour of a dependent relative. I hope that the Financial Secretary will confirm that a dependent relative—I am not sure that it is clear—would include a child prevented by infirmity from maintaining himself or herself. At any rate provisionally, unless I am mistaken in that, I will accept that subsection (3) covers such a child. It requires not merely that the disposition is made in favour of a dependent relative but that it is a reasonable provision for his care or maintenance.
I was slightly alarmed when I heard the Financial Secretary, in his commentary upon the word "reasonable", indicate that reasonableness would be judged in relation to the means of the parent or the degree of incapacity of the child. I can quite understand that, the subsection being at large as it stands in the clause, some limitation is desired to be placed upon it by the Government, and I understand, when it is general, what is the function of the word "reasonable". But I cannot think it right that any such consideration should be applied by the Treasury in deciding on a disposition in favour of a severely handicapped child, a child handicapped so severely that he or she will be in some form of care, for physical or mental reasons, for the whole of his or her life.
We are all acquainted with cases where the entire thoughts, efforts and lives of a couple are devoted to just such a child. Such a couple might be poor or very affluent. Their dominating thought for

the future is what will happen to that child when they have gone. One can well see that many of them would wish to make a disposition of their entire estate for the benefit of that child. They would not wish to say to themselves "What portion of the estate would be regarded as reasonable by the Treasury in regard to our means and to the state of the child? Let us try to fix upon a figure and leave that figure, and that figure alone, for the child in our will, or make it over by gift during our lifetime." They would think it wholly unreasonable that they should not be allowed to make over for the benefit of that child whatever they were able to provide and whatever they wished to provide.
I very much doubt whether in drafting the clause the Government have taken into account this special category. I want the Financial Secretary to make reference to it and to indicate that there will be no restrictive intention in the application of this relief in cases of the kind that I have mentioned. There can be no defeat of the objectives of the Bill in such an approach, and there is no question of this matter becoming a loophole for the transfer without tax of large masses of wealth. Nor is there any question of such wealth being in any ordinary sense enjoyed by the recipient.
I feel that the whole House will be in sympathy with what I am asking for, and I hope that the Financial Secretary will ensure that the clause covers without any restriction what my hon. Friend the Member for Londonderry was seeking in Standing Committee. Perhaps, when the hon. Gentleman is doing that, he will ensure that there is nothing which will operate in this respect differently in Northern Ireland from the rest of the United Kingdom. I say that as I am advised that the law in Northern Ireland is differently drawn at any rate in regard to care and protection.

Mr. John MacGregor: I take the point that was made by my hon. Friend the Member for St. Ives (Mr. Nott) that the provision should have been in the Bill in the first place. However, as one who participated in the lengthy debate in Standing Committee on this subject, I express my gratitude to the Financial Secretary not only for listening


to all the representations that were made at that stage but for covering most of them in the new clause.
I wish to make only three points. I shall make two points on new Clause 7 and one on new Clause 25. On new Clause 7, I must say to the Financial Secretary that it is a pity that he did not extend the exemptions in subsection (1) to certain transfers of value made by those other than parties to the marriage in specific circumstances.
I have in mind gifts by grandparents to grandchildren for such expenditure as university fees. I do not wish to get into the area of school fees as I do not wish to prolong the debate or to be tendentious, but if a grandchild wishes to go to university and it so happens that the parents' income is such that the means test is applied, it is often the situation that it is difficult for the parents to find the wherewithal to meet the extra expenditure required for university fees and the maintenance thereof.
The effect of inflation coupled with tax levels not keeping pace with inflation is such that for many families it is extremely difficult to meet the commitment of university fees. That is particularly so when the parents have no capital. If they have capital subsection (1) assists them, but if they do not have capital they may have to turn to grandparents or to others for assistance in the highly worthwhile objective of meeting university fees on behalf of their children. The Financial Secretary may say that there is the £1,000 exemption. Nevertheless, that is an exemption that is used for all general purposes.
I believe that gifts to meet university expenditure are highly worthwhile objectives which should be taken outside that exemption. There is unfair discrimination involving children whose parents have to meet the means test. Those parents come within the means test criteria for university fees. In many cases that will mean that the children do not go to university or training college. Surely the provisions could be extended to the extent that I have suggested. I am sorry that the Financial Secretary could not extend it as far as that. I hope that he will look at the matter again in a future Finance Bill.
7.45 p.m.
My second point concerns subsection (2). Why is it necessary to put in the condition to paragraph (b)? This relates to a situation where the child is not in the care of his parents. I am bound to say that I cannot see that there would be many loopholes were the child beyond the age of 18, if the condition were removed. I shall give one or two examples. First there is the means test situation. If the child at the age of 17 is moved into somebody else's care I suppose it could be argued that that child becomes eligible for a student grant, but if somebody is prepared to contribute to the child's education why is it necessary to go to these lengths? Would it not be better to allow the exemption to stop there? Given the present level of university expenditure we know that student grants are not meeting the total expenditure that the student has to find.
Where gifts are made to assist the student further, they will be caught by the clause. That does not apply only to universities. It may well be that the child is an orphan or in the care of a guardian, and that it moves on into the care of somebody else and wishes to undertake a professional education to acquire professional qualifications. Again, he will be disadvantaged by that condition remaining in the clause. It seems that fiscal objectives have been allowed to overcome educational objectives. From that latter point of view it seems desirable that we should encourage anyone in any situation to contribute to somebody else's education. I believe that that condition in the clause will not assist the objective that I have outlined.
My third point relates to new Clause 25. I agree with all the points that have been made by my hon. Friend the Member for St. Ives, but I have one additional reason for advocating the clause. The Financial Secretary will recall that on many occasions in Standing Committee mention was made of what became known as the famous "Gilbert and Sullivan shop". The owner of the shop was able to pass on to his children by taking advantage of all the various exemptions. I have taken quite a lot of professional advice on this matter. We may or may not be able to debate it, but it is relevant to the clause. I understand that one of


the Government amendments will remove the cumulative possibility of having the £1,000 exemption, the small gifts exemption, which the Government have introduced, and various other matters of that sort. That is the reading that we have all been getting of one amendment that the Government have brought forward, and which was raised with the Financial Secretary earlier this afternoon.
I believe that as matters now stand, and as we interpret the provisions, gifts to charities will be affected and that we will be taken backwards from the additional exemption which the Government have provided. As I understand it, where somebody makes a gift of £1,000 a year to a charity he will not get an exemption if he wants to give a further gift to his own relatives. On top of all the other arguments that have been put by my hon. Friend, I believe that if we were able to have a lower eventual tax bill on all gifts to relatives—for example, to immediate children—and others we would help to alleviate the damage that would be done by a later Government amendment. I hope that the Financial Secretary will be able to persuade me that I am wrong in my interpretation, but that is the interpretation held by many people outside the House. It will mean that people will have to choose between making annual gifts to charities or gifts to their relatives.
If the rate of tax on lifetime gifts to relatives were lower there would be more of an incentive to pay it. That is an additional argument for new Clause 25.

Mr. Pardoe: I wish to address my remarks to Amendment No. 201, which is bracketed with others following Amendment No. 200. The hon. Member for St. Ives (Mr. Nott) said that he had some difficulty in finding Government Amendment No. 200. I had difficulty in finding my Amendment No. 201. It is on page 747—in case the Financial Secretary should wish to read it.
Amendment No. 201 goes marginally wider than new Clause 7. It is an amendment to Schedule 5 but it is extremely relevant to the new clause. Schedule 5 deals with changes in settlements already created. Paragraph 15 of the Schedule exempts the creation of a settlement on divorce which would have been a chargeable event outside the scope

of Schedule 5, but does not exempt a chargeable event inside settlements where the settled property has been relied upon in the divorce maintenance arrangements.
If Amendment No. 201 to Schedule 5 is not accepted it will mean that the making or the variation of a settlement on divorce will be exempt, but the subsequent changes of interest in the settlement will not. That would heavily penalise settlements. I am sure that the Financial Secretary will agree that divorce provision in settled form is normal and standard practice approved by the courts and Parliament, with additional factors such as income provision during widowhood. Very often a settlement will be varied on divorce, and quite often a settlement, whether or not varied, will be envisaged at the divorce as providing for the wife until remarriage and thereafter for the child or children. The amendment is needed to avoid the taxation of a change on the variation of a settlement or on the termination of the wife's interest on remarriage.
The amendment is consistent with estate duty practice as it has been over the years. It is consistent with estate duty practice as it has been in the case of a variation of settlement, though estate duty law was not entirely clear on the matter and probably much of this fell in the area of concession rather than statute law. We should not leave it for discretion and concession in future. We should write it into statute law.
I hope that the Financial Secretary will recognise, first, that the amendment is necessary to do what I want it to do, secondly, that what I want it to do is perfectly reasonable, and, thirdly, that it will cost peanuts and therefore should be accepted. I hope that he will accept it.

Mr. Brian Sedgemore: I was surprised to hear the hon. Member for St. Ives (Mr. Nott) say that he was not grateful for the introduction of the clause. In so saying he was being less than his usual generous self. The clause and the Opposition amendment which my hon. Friend the Financial Secretary has accepted show all the signs that he is doing precisely what the Opposition wanted him to do. The Government listened carefully, took note and have


come back to the House with just the amendments that were asked for.
I was equally surprised when the hon. Member for St. Ives suggested that the House should move on quickly from the clause, possibly without examining it properly. Yesterday we had a hysterical and wretched debate on the timetable motion. Now it seems that the hon. Gentleman, who spoke from the Front Bench, is imposing a guillotine on his side. I think that we should look at the clause carefully before we decide whether to accept it.
I sincerely believe in subsection (3), which is in these terms:
A disposition is not a transfer of value if it is made in favour of a dependent relative of the person making the disposition and is a reasonable provision for his care or maintenance.
In subsection (5) the definition of "dependent relative" is as follows:
dependent relative" means, in relation to any person, a relative of his, or of his spouse, who is incapacitated by old age or infirmity from maintaining himself, or the mother of that person, or of his spouse, if the mother is widowed or living apart from her husband, or, in consequence of dissolution or annulment of marriage, a single woman;
That is an eminently sensible amendment which, as has been said, should have been in the Bill from the beginning.
I go along with the right hon. Member for Down, South (Mr. Powell) in expecting the Inland Revenue to interpret the clause to the point of generosity for someone who is incapacitated. It would be churlish to limit the maintenance of someone who was genuinely incapacitated, and I am sure that the Financial Secretary will give us some encouragement on that matter.
My admiration for the clause stops at that point. Subsection (1) reads as follows:
A disposition is not a transfer of value if it is made by one party to a marriage in favour of the other party or of a child of either party and is—

(a) for the maintenance of the other party, or
(b) for the maintenance, education or training of the child for a period ending not later than the year in which he attains the age of eighteen or, after attaining that age, ceases to undergo full-time education or training."

This is a financial statute in which we deal with taxation and revenues. As in

all taxation matters, we are talking about the social, economic and political policies which the Government wish to pursue. Paragraph (b) refers to children, but the words "maintenance, education or training" are not defined. One could put almost any interpretation on them. Even if the concept of reasonableness were introduced, within the confines of those words concessions could be made about which we should not be happy. One does not have to stretch the meaning of those words to show that they could be offensive to the Labour Party and to the manifestoes which it presented to the electorate in February and October last year.
The hon. Member for Norfolk, South (Mr. MacGregor) touched on the making of a disposition, not a transfer, in relation to education. He carefully and skilfully spoke of university fees, which the right hon. Member for Finchley (Mrs. Thatcher) discussed in Committee. It must be obvious to anyone who considers the clause with any realism that when we talk about education and transfers of value of capital transfer tax in relation to the new clause we are not talking about university fees. We are talking about fees for children who go to school, and that means fees for independent and public schools.

Mr. Bob Cryer: Would not the clause also exempt fees paid to direct grant schools? Would not that be contrary to the policy announced by the Secretary of State for Education and Science, who wishes direct grant schools to be brought within the State system? Would not that be welshing on the programme of the Secretary of State for Education and Science?

8.0 p.m.

Mr. Sedgemore: I was coming to that point. I would expect the Financial Secretary in replying to tell the House how much consultation there has been with the Secretary of State for Education. I find this subsection extraordinary. It concerns not merely public schools but direct grant and independent schools. It even touches the question of private universities. I understand that a private university has been set up. The subsection could be used for fees involved in sending people to that university, which presumably has been set up with a view to destroying the State university system.
I was under the impression that it was part of the Government's policy to exempt direct grant and public schools from charitable status. Now we are proposing a clause which, if we exempt these institutions from charitable status, will enable parents who are determined to send their children to independent, direct grant and public schools to do so by the back-door method of a transfer of capital. The Financial Secretary must come clean, together with the Chief Secretary and the Chancellor and tell us whether he is directly opposed to the educational policies set out in our manifesto. We must have an explanation.
If we are to allow people to deal with educational expenses through a transfer of capital we are doing exactly what Tawney said in one of his famous books. We are encouraging people to send their children to public schools. We are encouraging the social vanities of the middle classes. If we approve this clause we shall be encouraging people to send their children to public schools, thereby encouraging divisions in our society which we find most objectionable. We would also be encouraging the misuse of resources as between the public school sector and the State school sector. We are trying to encourage these middle class people to send their sons and daughters to the State schools so that they will use the energies about which Tory Members are always telling us to improve the State sector.
This subsection goes against all those aims of the Labour Party. We must have an explanation. If we do not, I must tell my hon. Friend that we shall be standing outside the Division Lobby and directing the troops on the Labour side of the House into our Lobby. It may well be that we shall get the bulk of our back benchers and, in this case, most Front Bench members of the Labour Party. It may be that by a side wind the Treasury has completely misunderstood the purport of this subsection.
It does not end there. What do we mean by the word "training"? There is no definition. I have looked at the definition clause and at the interpretation clause but have failed to find "training" defined. It is not defined in the

clause. The clause defines "child", "dependent relative", "marriage", and "year". It is good of the Treasury to define "year". I would have been more obliged if it had defined "training". What does it mean? Tax lawyers and tax dodge accountants will get hold of this and advise people how to make transfers of capital which they might not otherwise make and so avoid paying tax.
What about someone in one of Her Majesty's training establishments, commonly known as a detention centre or borstal, who is under the age of 18? Are we to discover that under this subsection transfers of capital made to boys and girls at borstal are exempt from tax? That would appear to be contrary to public policy. Is it really the intention of the Treasury to act in this way and to give criminals, or potential criminals, favoured treatment when their parents have enough capital to come within the ambit of this subsection?
People can train for all kinds of things. They can train for the ballet. No doubt that would come within the ambit of this clause. People can train as apprentices. I would like to know whether the clause covers apprenticeship training. A person can train to become the world's finest athlete. What happens if a boy of 16 decides that he wants to become the fastest miler in the world and asks his rich father to provide him with a private running track at a cost of £7,000? A transfer of capital is made and the running track is given to the son. Is that £7,000 to be exempt from the tax?
I do not want to pick on unlikely examples, although I remember that in 135 hours in Committee there were some of the most unrealistic examples imaginable. I can remember a young athlete age 16 who decided to become the world's best shot putter. His name was Arthur Rowe. One of the things he needed, apart from a shot to putt, was 100 lbs of steak a week to build up his body. If we are to remain in the Common Market 100 lbs of steak a week could become an expensive business. It could not be borne out of income. It could mean a transfer of capital. Are we to say that a budding Arthur Rowe, eating 100 lbs of steak a week, is to gain exemption from a transfer of capital from his parents


merely because he decided one night that he wanted to become the world's great shot putter? This seems absurd.
In some circles it is deemed to be training for life to learn how to handle oneself at a debutantes' ball. Are we saying that 16-year-old girls should be encouraged to attend debutantes' balls as a training for life and that the expense of those balls, paid for out of transfer of capital, is to be exempt from this tax? Is that what the Financial Secretary has in mind?
I turn to "maintenance". Under Section (1)(a) maintenance applies not merely to the children but to the maintenance of one spouse by or for the other. In some circles it may be considered a normal part of the maintenance of the one spouse by or for the other that they should have a decent wine cellar. Most working-class people in Luton have a couple of empty, rusty cans of beer in their wine cellars. Are we saying that for the maintenance of one spouse by the other the provision of a wine cellar with the best red and white wines of France is to be included and that if those wines are bought out of a transfer of capital these people will be exempt from the tax?
I ask the Financial Secretary to look at this clause again and see whether these definitions should not be tightened up.
I move to new Clause 25, the purport of which seems to be special exemptions for transfers to relatives. What I find offensive about the clause is that it stands against every Conservative principle we have ever heard since the days of Edmund Burke. As I understand it, the fundamentals of Conservatism are concerned with individuals going through life and exerting qualities of enterprise, thrift and determination by standing on their own feet. Surely that central pillar of Conservatism should be upheld by Conservative Members—or do they intend to attack their own political philosophy? Certainly that philosophy will be vitiated if we approve the new clause, which will give preference to any transfer of gifts between one citizen and another and between one relative and another. Adam Smith would never have stood for that, nor would Bentham or Ricardo—and certainly Malthus would probably have had a fit and given up the church at the same time.
Provisions on the lines of new Clause 25 have led to some of our industrial problems. The Labour Government have introduced the capital transfer tax for the precise purpose of preventing vast accumulations of wealth being handed down from father to son, father to daughter, father to cousin and father to third cousin and father to even more distant relatives.
The Opposition in their wrecking, irresponsible amendments inform us that we should make special exemptions to prevent what the provision is all about. New Clause 25 and the other amendments strike at the heart of the tax.
If we look at British industry, we know that there is some good management, some second generation management and some third generation management. What encourages such a system? Management of that kind is encouraged by giving preference in the transfer of gifts from one relative to another relative. That form of management has been encouraged because since 1884 we have had on the statute book estate duty—which, as the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) said, was admirable because one did not always have to pay it and could avoid it, unless one was unlucky in the timing of one's death.
New Clause 25 would take us back to estate duty and to second generation management. It does not follow that because a father hands money down to his son or daughter or hands down his business and thus avoids paying tax the business will continue to flourish under the second and third generation of management as it flourished under the father's guidance. I plead with my hon. Friend the Financial Secretary to define the terms in his own new clause and, secondly, emphatically to reject the irresponsible Conservative wrecking amendments.

8.15 p.m.

Mr. Peter Rees: There were occasions in Committee upstairs when I thought that the Financial Secretary was not giving full rein to the generosity which we know lurks in the recesses of his character. The reason has become more and more apparent. It is quite clear that behind him was the glowering figure of the hon. Member for Luton, West (Mr.


Sedgemore), who in Committee represented the interests of the Tribune Group. It is not for me to comment on the balance of power in the Labour Party, but I thought that it was a little arrogant for the hon. Gentleman to claim that on this issue he spoke for all Labour Party Members.
I wonder whether those hon. Members opposite who send their sons to private schools—and I do not deplore their judgment on this matter—are grateful to the hon. Gentleman for suggesting that school fees paid out of their own taxed income should now be subject to capital transfer tax. I wonder whether people outside the House will feel that this is a fair way of conducting their affairs.
I do not think this is the time or the place to discuss public or private education; we can do so on other occasions. However, it is a pity that we did not hear the hon. Member for Luton, West on these matters upstairs in Committee, when we had plenty of time at our disposal, rather than in the short discussions which we are now allowed on Report following the Government's machinations.

Mr. Cryer: I find the comments of the hon. and learned Gentleman about my hon. Friend the Member for Luton, West (Mr. Sedgemore) a little churlish. Since we are now discussing a new clause, it is hardly likely that my hon. Friend could have elaborated on it upstairs in Committee when at that time its terms were unknown.

Mr. Rees: The hon. Member for Keighley (Mr. Cryer) reinforces our point that the Bill which we are now debating is not even the Bill that emerged from Committee but is an entirely new Bill following the major amendments tabled during the past 10 days. I was seeking to make the point that if the hon. Member for Luton, West feels as strongly as we do on these matters, he could have voted against the guillotine motion.
I agreed with the hon. Member for Luton, West when he suggested that the implications of the clause deserve close consideration. There is an important principle at stake, but it was not the one to which the hon. Gentleman drew

attention. The principle in question relates to the question of how far, for tax purposes, we should regard the family as a unit. We have been remarkably inconsistent on this score. Under capital gains tax it was possible to make a transfer free of capital gains tax to wives but not to children. In other words, wives and husbands were treated as one unit but whole families were not so treated. On the question of income tax it appears that in a matter of weeks we shall be debating a new clause which the Chancellor, ever conscious of his undertakings to his back benchers, will introduce to aggregate the investment income of children with that of their parents. I hope that we may look for consistency and logic. If children are to be treated as one unit with their parents for income tax purposes, let them be treated as one unit for CTT purposes.
The Chancellor of the Exchequer, with stern, unbending Marxist principles, takes no account of these ties of blood and affection. However, I am happy to say that on this occasion he has evidently paid some attention to the debates upstairs in Committee. No doubt the Chief Secretary and the Financial Secretary relayed to him the interesting points that were made. But the right hon. Gentleman has not advanced far down the road along which we are endeavouring to coax him. The fruits of our coaxing are embodied in new Clause 7, but I do not believe that its provisions go far enough. However, they show that the right hon. Gentleman recognises that some consideration is due to family feeling and that people should be entitled to pass on, without excessive charge, the fruits of their labours. One of the most deeply founded instincts is the desire to provide for one's family and to pass on what one has created.
As my hon. Friend the Member for St. Ives (Mr. Nott) pointed out, the only country in the world which in its tax system does not recognise this deep-seated human instinct is Sri Lanka. Although perhaps we share that country's political objectives, I do not believe we should look to it for fiscal innovation, particularly when it has been counselled in these matters by Lord Balogh and Professor Kaldor. On another occasion we can perhaps explore the consequences


in the countries to which the two gentlemen I have mentioned have offered their fiscal advice.
While I congratulate the Financial Secretary on having deferred to our susceptibilities in introducing new Clause 7, I ask him to go further along the road, taking with him the diffident hand of the Chancellor. I ask him to consider new Clause 25 more closely than he might otherwise be disposed to do.
I hope that the Financial Secretary will deal with the three detailed points concerning new Clause 7. He said that the clause would cover provision for wives and former wives, and he referred to a point which the Opposition made in Committee concerning Schedule 5, paragraph 15. The definition provision refers to the varying of a former disposition relating to a former marriage. Possibly a provision for maintenance after the dissolution of a marriage would be covered by that. However, will it cover provision for a former wife after the dissolution of a marriage, since she would then no longer be a party to the marriage?
It is wrong that relief should turn on fine points such as whether the maintenance agreement or settlement was made before or after the decree became absolute, because very often these matters are not finalised until after the decree is made absolute, when the former wife will no longer be a party to the marriage.
New Clause 7 applies to dispositions. I have assumed that it will cover notional disposition on death. I hope so, because I see no distinction. If it is right to exempt from capital transfer tax a provision made by the father during his lifetime, it is even more important that that exemption should apply on his death when he is no longer in a position to care for his family. The variation of a settlement is covered by subsection (4), which was introduced in deference to the arguments of the Opposition.
As regards Schedule 5, paragraph (15), let us assume that the life interests of the husband and wife in a marriage settlement are to be succeeded on their deaths by a discretionary trust in favour of their children. Let us assume that on the dissolution of their marriage the life interests of husband and wife are to be extinguished so that the discretionary trust is accelerated. As I read subsection

(4), notwithstanding the extinction of those life interests the interest in possession is to be regarded as continuing. Therefore, does it follow that there will be no periodic charge on the discretionary settlement which arises in favour of the children?
These points are of some technicality but are nevertheless important, and I hope that the Financial Secretary will address himself not only to the more general points exemplified by new Clause 25 but also to the narrower points.

Mr. Tomlinson: I was surprised that the hon. and learned Member for Dover and Deal (Mr. Rees) began his remarks with a long, rambling and irrelevant diatribe against my hon. Friend the Member for Luton, West (Mr. Sedgemore), when he speculated how uniformly held were the sentiments which my hon. Friend expressed. As a totally unrepentent member of the Manifesto Group, I give the assurance that I endorse much of what my hon. Friend said. There is in the Labour Party a basic degree of common understanding on such principles, which does not divide us.

Mr. Cryer: Will my hon. Friend accept that the Labour Party stands on the manifesto? Will he accept further that one of the manifesto principles was that tax relief for the so-called public schools should be ended and that there is solid unanimity within the Labour Party that there should be close scrutiny of the private sector of education? We believe that direct grants should be absorbed into the public sector so as to allow more sons and daughters of underprivileged people to attend these schools, if necessary.

Mr. Tomlinson: I congratulate my hon. Friend on his assiduity and understanding of the party manifesto in that regard.

Mr. Kilroy-Silk: Will my hon. Friend give way?

Mr. Tomlinson: No. I had better not. The right hon. Member for Yeovil (Mr. Peyton), who has just left the Chamber, muttered something about a filibuster during the relevant contribution of my hon. Friend the Member for Luton, West.
I should like to deal with one aspect of the contribution of the hon. and learned Member for Dover and Deal who seems to have an obsession with


Marxism and Marxists. We have heard that insinuation from him before. I am sure that he will take no offence if I suggest that the quality of that kind of contribution makes him more akin to Groucho than to Karl.

Mr. Sedgemore: Does my hon. Friend agree that the hon. and learned Member for Dover and Deal (Mr. Rees) could not distinguish between a Marxist and a priest?

Mr. Deputy Speaker (Sir Myer Galpern): There is a great deal of business to be completed before 12 o'clock. I hope that hon. Members will try to avoid interventions of the kind that we have experienced recently.

Mr. Tomlinson: I respect the decision of the Chair. Having dealt with the irrelevancies which have infiltrated into the debate, I come to the real issues.
Despite the reservations of some of my hon. Friends about the terminology of the clause and the effects of that terminology, the clause will give effect to the points raised in Committee by the Opposition. Here we have an example of a clause where the Government, with the openness of mind for which they are renowned, have listened to the arguments, accepted the good and rejected the bad. The Government have now decided to incorporate the good points into legislation. Yet we have experienced a further demonstration of the churlishness of the Opposition. The new clause is to the credit of the Government, since they have kept the promise they gave in Committee.
The hon. and learned Member for Dover and Deal expressed his doubts about the circumstances of the dissolution of a marriage. I am convinced that the clause puts beyond any doubt the fact that a disposition made on the occasion of the dissolution of a marriage will be covered by the spouse exemption. That is made clear in new Clause 7. I cannot see the reason for his reservations.
I want now to deal with one or two of the specific matters raised by the hon. Member for Norfolk, South (Mr. MacGregor). He talked about education and training and was concerned especially with the effect on university fees. I do not want to take up any

of the examples quoted by my hon. Friend the Member for Luton, West but it is clear that many of the arguments that he advanced in the debate have to be considered closely by the Treasury. However, in view of the obsession about university fees, even when we know that there are more extreme examples, we have to remember that there are a great many people undergoing education and training who are in a much more serious position than people in universities. I have in mind especially people in colleges of further education studying for higher national certificates and higher national diplomas. Many of the more backward Conservative-controlled authorities are not even giving them grants, let alone worrying about the consequences of their having to meet commitments after parental contributions have been deducted from them.
The hon. Member for Norfolk, South went on to talk about the qualification in line 12, which he did not like. It says that the
… above applies only if before attaining that age the child has for substantial periods been in the care of the person making the disposition.
The qualification is wholly reasonable, in my view. At this stage of the argument, it is totally wrong of the hon. Member for Norfolk, South to say that if we remove that qualification it will not create many loopholes. Our aim should be not to create any more loopholes but to block up the many loopholes which have existed for far too many years in the area of capital taxation.
8.30 p.m.
New Clause 7 will meet with the approval of most Government supporters. If we get the assurances that we seek about some of the definitions, it will probably meet with our unqualified approval.
When we come to new Clause 25, however, the situation is very different. I urge my hon. Friend the Financial Secretary not to be too receptive to the blandishments of the Opposition. The hon. Member for St. Ives (Mr. Nott) gave us a very interesting discourse on consanguinity. But then he went on to say that he would ask his right hon. and hon. Friends to support new Clause 25 despite the fact that in his view it was already too widely drafted and needed to be


looked into in depth. The hon. Gentleman is engaging in an exercise in irresponsibility if he is prepared to seek to get the clause on the statute book when he accepts that in major areas it is far too wide. I hope that my right hon and hon. Friends will reject his arguments.
I am very concerned about the comments made by the right hon. Member for Down, South (Mr. Powell). The concern that he showed about new Clause 7(3) is exceedingly important. The use of the word "reasonable" always worries me. In far too many areas of legislation the word "reasonable" seems reasonable at the time this House is considering a Bill, and then we see the effect of it afterwards. We have a good example of the use of the word in the Offices, Shops and Railways Premises Act. Reference is made there to "a reasonable temperature". A great many industrial disputes have arisen over the interpretation of the word "reasonable".
If we are to leave subsection (3) as it is drafted at present, there must be a clear understanding not only of the criterion on which "reasonable" will be interpreted but that the person who believes that he has been affected adversely by the interpretation of the word shall have a right of appeal. Failing such an understanding, the inclusion of the word will be regarded by many people as unsatisfactory.
On the whole, I congratulate my right hon. and hon. Friends for bringing forward this new clause. It is yet another example of the redemption of promises made in Committee. I hope that the Opposition will accept it in good faith and with good grace and not continue with their churlishness and criticism. After all, to a large extent they have got what they wanted.

Dr. Gilbert: I am not sure whether this is the first time that the hon. Member for St. Ives (Mr. Nott) has been back on the Opposition Front Bench. It is the first time I have had the pleasure of debating with him, and I am glad to see him there again. I sympathise with him in his difficulty concerning the marshalling of amendments. I am afraid that I cannot add anything useful at this stage. It is a situation that we all regret.
My best course, I believe, will be to deal with the matters of detail raised by the hon. Gentleman rather than with his general points. He asked me about dependent relatives. "Dependent relative" is defined in the same way as it is defined under the 1965 capital gains tax relief. As I understand it, it covers the case of the father who is incapacitated. To that extent, therefore, there is symmetry, although it is not perfect.
The hon. Gentleman again pressed the point about the family retainer. I hope to come back to the House before too long with concrete proposals on that matter. I am sure that the hon. Gentleman recognises—indeed, he did in his temperate speech—that unless it is defined fairly tightly there could be scope for very large avoidance of tax. For example, a close relative could be taken on as a quasi employee for a month or so and thereafter be treated as an ex-employee. In that way a coach and horses could be driven through the tax provisions.
The hon. Gentleman talked at some length, quite properly, about new Clause 25 and my hon. Friend the Member for Meriden (Mr. Tomlinson) also reverted to the general principle. I am sure the hon. Member for St. Ives will recall that in the Green Paper published by the then Chancellor of the Exchequer, now Lord Barber, there was no commitment to the principle of consanguinity. That matter was left in the air for discussion.
I cannot accept the principle of new Clause 25. We have gone some way in making a preferential distinction regarding gifts on marriage. The particular instance cited by the hon. Gentleman of a £5,000 transfer from a parent was introduced into the Bill to take account of the one-parent family.
The hon. Gentleman made some international comparisons. I am sure that with his sophisticated knowledge of the international fiscal scene—I say that in no way with tongue in cheek—the hon. Gentleman will recognise that international comparisons are not very useful. He referred to France and Germany, where the surviving spouse rate is so much lower than the rate to other donees. I think that makes my point. The hon. Gentleman had to pray in aid that there


was a 20 per cent. rate to a surviving spouse in France and a 15 per cent. rate in Germany and he asked why we could not be as generous in that respect. In fact, we are being more generous than either the French or German provisions because there will be a nil rate to surviving spouses under our tax system. I do not wish to make a major point of that. However, it helps to keep in perspective many of the international comparisons that we hear from time to time when discussing this tax.

Mr. Nott: On a point of clarification. My point related to surviving spouses and direct descendants in France.

Dr. Gilbert: So be it. I am happy to take that point on board as well. The fact is that it is not profitable to compare isolated elements in the tax system of one country with those of another. These matters will vary as long as we do not have harmonisation imposed on us.
The right hon. Member for Down, South (Mr. Powell) was rightly concerned about the problems of the severely handicapped child. As I construe our new clause, the case about which the right hon. Gentleman was concerned will be covered by subsection (3). The right hon. Gentleman asked more questions arising from the fact that he inferred that subsection (3) would cover the case he was putting forward.
The right hon. Gentleman asked about the word "reasonable". My hon. Friend the Member for Meriden was also concerned about this. We have the word "reasonable" in the Bill, as I am sure that right hon. Gentleman recognises, to cover all possible situations from the very serious case that he introduced to the rather less serious case. The application of the provision is subject to the right of appeal if reasonableness is not, in the taxpayer's view, deemed to have been interpreted in a fair way. The right of appeal is enshrined in Schedule 4, paragraph (7).
The right hon. Gentleman asked whether we had any restrictive intention. We do not intend to operate subsection (3) in a restrictive way. I hope that this gives the right hon. Gentleman the assurance he was seeking.
The right hon. Gentleman asked about different circumstances in Northern Ireland. I have no immediate knowledge of any situations in Northern Ireland which would affect the application of this provision. If the right hon. Gentleman has in mind anything in particular, I shall be grateful if he will write to me about it and I shall look into it.
The hon. Member for Norfolk, South (Mr. MacGregor) raised three questions. He asked why we did not under this relief cover gifts by grandparents to their grandchildren for university fees. If grandparents are paying for the education of their grandchildren this will be tantamount to a gift to the parents, because in the normal course of events the parents would be expected to pay. If the parents are not in a sufficiently strong financial position to do that, and if somebody else stands in to provide the necessary money, clearly that is tantamount to a gift to the parents.
The hon. Gentleman asked me not to pray this argument in aid but I cannot avoid doing so. The exemption of £1,000 a year is available to grandparents. That should cover university fees, even in this inflationary age, particularly if one adds to that the gifts out of income relief.
The hon. Gentleman asked about the removal of the cumulative effect of various reliefs according to an amendment which appears later on the Paper. I was asked about this earlier today. I assure the hon. Gentleman that there is no intention on our part to remove the cumulative effect of the relief, but I shall look into it. The hon. Gentleman has his advisers and I have mine. In the last resort these things are interpreted neither by us in this House, on either side of it, nor by our advisers, but by the courts. I am advised that the relief is as good as it was always intended to be.
The hon. Member for Cornwall, North (Mr. Pardoe) referred to Amendment No. 201 and talked about the variation of a divorce separation settlement when the wife remarried. The exemption applies so long as the maintenance condition is settled. This relates also to one of the points raised by the hon. and learned Member for Dover and Deal (Mr. Rees). It covers subsequent variations as well as the first variation of a settlement. There will be no exemption if the former


wife remarries and the variation is not in satisfaction of a maintenance claim. Other than that, I am sure the House will be aware that Government Amendment No. 200, to which I did not refer, removes paragraph 15 of Schedule 5 completely to make way for the new clause. As far as we can see, all the situations covered by Amendment No. 201 where there is a case for relief should be within the ambit of the new clause.
The hon. and learned Member for Dover and Deal asked three questions. He asked about the provision for a former wife after the dissolution of marriage and where settlement came after the decree absolute. The words "former marriage" could have no purpose at all if they did not apply where the marriage had ended. Perhaps this is one of the things which seem self-evident to a layman but not to a lawyer; but that, I am informed, covers the point raised by him.
With regard to disposition on death, the provision as it stands applies.
The hon. and learned Gentleman asked about discretionary trusts where, following the dissolution of a marriage, the extinction of a life interest discretionary trust would come into effect. If there is a discretionary trust it will be subject to periodic charge. There will be no interest in possession in the settled property. Therefore, the normal discretionary trust rules will apply.

Mr. Peter Rees: Subsection (4) of the new clause states:
where a disposition satisfying those conditions is a disposal of an interest in settled property, the interest shall not … be treated for the purposes of that Schedule as coming to an end.
It seems to follow that, whatever the subsequent interest after the extinction of the interest in possession, the interest in possession would be treated as in existence and, therefore, there could not be a periodic charge. Will the Minister reconsider what he said? If he cannot give me the answer now, perhaps he will write to me.

Dr. Gilbert: I am much obliged to the hon. and learned Gentleman. I certainly undertake to do that.

8.45 p.m.

Mr. MacGregor: Will the hon. Gentleman also look again at the question I raised about lines 12 and 13 in the new

clause and why they are necessary? On his other point about cumulative gifts, I hope that it will be possible to return to this matter later so that we can argue the point that he has put back to me.

Dr. Gilbert: I apologise to the hon. Gentleman for not covering his point about lines 12 and 13. If they were withdrawn, as the hon. Gentleman suggests, the grandparents could take over the parental responsibilities whether or not they had ever been in loco parentis. The prime responsibility and the natural responsibility is on the parents for taking care of the children. Again, we are back to the situation about which the hon. Gentleman was talking. In other words, it would be, in effect, a concealed transfer for the benefit of the parents to relieve them of responsibility which they would otherwise normally assume.
I hope that I have dealt with most of the points raised by Opposition Members.
I turn now to the extremely powerful speeches made by my hon. Friend the Member for Luton, West (Mr. Sedgemore) and my hon. Friend the Member for Meriden. I listened with admiration to the analysis of my hon. Friend the Member for Luton, West. It may well be that some of the points of definition about maintenance and training that he raised will need to be looked at. I am indebted to him for raising them. I thought that some of the examples he put before us were a little fanciful—about large transfers to donees in borstal institutions and other institutions provided by Her Majesty for the training of the less fortunate members of the community, and the provision for debutantes' balls to be a form of on-the-job training. These are all matters that need to be looked at. If it turns out that there are abuses of the sort to which my hon. Friend has referred, I assure him that we shall not be backward in dealing with them. We shall be happy to have him chasing us to see that we do so.
The new clause goes wider than that. I am sure that my hon. Friend the Member for Luton, West would agree with my hon. Friend the Member for Meriden that there are circumstances in which people are taking courses at colleges of further education to gain diplomas and higher national certificates where it would be appropriate for relief to be given.


This is one of the difficulties that all my hon. Friends, including my hon. Friend the Member for Keighley (Mr. Cryer), would accept as being a proper case for relief.
As to the more general point, I have a great deal of sympathy with my hon. Friend the Member for Luton, West. I would not by any means go as far as agreeing with him that second generation management is necessarily second-rate management—of course not. On the other hand, it has never been any part of our philosophy to believe that entrepreneurial talents are transmitted hereditarily any more than are academic or athletic talents. It might well be to the greater health of the British economy if those businesses which are relatively successful were sold outside the family before a second, third or fourth generation was running them. All the most successful businesses that were quoted to us in Standing Committee time after time were examples of businesses which had started as family businesses and had then gone public or been taken over by bigger enterprises. Opposition Members made the case for us many times. However, it is inappropriate to go much wider on that general theme, although the contributions of my hon. Friend the Member for Luton, West were very valuable on that point.

Mr. Cryer: My hon. Friend has given a very good assurance, but will he address his mind to the specific point about payments for public schools being exempt under the clause? That is a cause of very great concern, as my hon. Friend the Member for Luton, West (Mr.

Sedgemore) pointed out. I do not think that my hon. Friend has satisfied the House that the clause will not provide a loophole and afford these people a tax advantage when, as he knows, the Labour manifesto states that this will be excluded.

Dr. Gilbert: I am obliged to my hon. Friend. I take his point seriously. I assure him that this is a matter that we shall consider. There will be difficulties again about drawing a line between support for people attending such institutions and the sort of situation to which my hon. Friend the Member for Meriden referred. I certainly undertake to look at the matter again.
I commend the clause to the House. I am prepared to recommend my hon. Friends to accept Amendment (i). I can give the hon. Member for St. Ives no encouragement that I can look favourably on new Clause 25.

Mr. Nott: With the leave of the House, may I clarify what the official Opposition would like to do? We wish to divide on Amendment (e). We reserve our position to move new Clause 25 formally at the appropriate stage after new Clause 20 has been debated.

Question put and agreed to.

Clause read a Second time.

Amendment proposed to the proposed Clause: (e), in line 14, leave out 'dependent'.—[Mr. Nott.]

Question put, That the amendment be made:—

The House divided: Ayes 238, Noes 286.

Division No. 127.]
AYES
[8.52 p.m.


Adley, Robert
Budgen, Nick
Douglas-Hamilton, Lord James


Aitken, Jonathan
Bulmer, Esmond
du Cann, Rt Hon Edward


Alison, Michael
Burden, F. A.
Durant, Tony


Atkins, Rt Hon H. (Spelthorne)
Butler, Adam (Bosworth)
Dykes, Hugh


Awdry, Daniel
Carlisle, Mark
Eden, Rt Hon Sir John


Banks, Robert
Chalker, Mrs Lynda
Edwards, Nicholas (Pembroke)


Bell, Ronald
Churchill, W. S.
Elliott, Sir William


Bennett, Dr Reginald (Fareham)
Clark, Alan (Plymouth, Sutton)
Ewing, Mrs Winifred (Moray)


Berry, Hon Anthony
Clark, William (Croydon S)
Eyre, Reginald


Biffen, John
Clarke, Kenneth (Rushcliffe)
Fairbairn, Nicholas


Biggs-Davison, John
Clegg, Walter
Fairgrieve, Russell


Blaker, Peter
Cockcroft, John
Farr, John


Bowden, A. (Brighton, Kemptown)
Cooke, Robert (Bristol W)
Fell, Anthony


Boyson, Dr. Rhodes (Brent)
Cope, John
Finsberg, Geoffrey


Brittan, Leon
Cormack, Patrick
Fletcher, Alex (Edinburgh N)


Brotherton, Michael
Corrie, John
Fletcher-Cooke, Charles


Brown, Sir Edward (Bath)
Costain, A. P.
Fookes, Miss Janet


Bryan, Sir Paul
Crouch, David
Fowler, Norman (Sutton C'f'd)


Buchanan-Smith, Alick
Crowder, F. P.
Fox, Marcus


Buck, Antony
Dodsworth, Geoffrey
Fraser, Rt Hon H. (Stafford &amp; St)




Fry, Peter
Lloyd, Ian
Roberts, Wyn (Conway)


Galbraith, Hon. T. G. D.
Loveridge, John
Rossi, Hugh (Hornsey)


Gardiner, George (Reigate)
Luce, Richard
Rost, Peter (SE Derbyshire)


Gilmour, Rt Hon Ian (Chesham)
MacCormick, Iain
Sainsbury, Tim


Gilmour, Sir John (East Fife)
McCrindle, Robert
Scott, Nicholas


Glyn, Dr Alan
Macfarlane, Neil
Scott-Hopkins, James


Goodhart, Philip
MacGregor, John
Shaw, Giles (Pudsey)


Goodlad, Alastair
Macmillan, Rt Hon M. (Farnham)
Shaw, Michael (Scarborough)


Gorst, John
McNair-Wilson, M. (Newbury)
Shelton, William (Streatham)


Gow, Ian (Eastbourne)
McNair-Wilson, P. (New Forest)
Shepherd, Colin


Gower, Sir Raymond (Barry)
Madei, David
Shersby, Michael


Grant, Anthony (Harrow C)
Marten, Neil
Silvester, Fred


Gray, Hamish
Mates, Michael
Sims, Roger


Grieve, Percy
Mather, Carol
Sinclair, Sir George


Griffiths, Eldon
Maudling, Rt Hon Reginald
Skeet, T. H. H.


Grist, Ian
Mawby, Ray
Speed, Keith


Hall, Sir John
Maxwell-Hyslop, Robin
Spence, John


Hall-Davis, A. G. F.
Mayhew, Patrick
Spicer, Jim (W Dorset)


Hamilton, Michael (Salisbury)
Meyer, Sir Anthony
Spicer, Michael (S Worcester)


Hampson, Dr Keith
Miller, Hal (Bromsgrove)
Sproat, Iain


Hannam, John
Miscampbell, Norman
Stainton, Keith


Harrison, Col Sir Harwood (Eye)
Mitchell, David (Basingstoke)
Stanbrook, Ivor


Harvie Anderson, Rt Hon Miss
Moate, Roger
Stanley, John


Hastings, Stephen
Monro, Hector
Steen, Anthony (Wavertree)


Havers, Sir Michael
Montgomery, Fergus
Stewart, Donald (Western Isles)


Hawkins, Paul
Moore, John (Croydon C)
Stewart, Ian (Hitchin)


Hayhoe, Barney
More, Jasper (Ludlow)
Stokes, John


Henderson, Douglas
Morgan-Giles, Rear-Admiral
Stradling Thomas, J.


Heseltine, Michael
Morrison, Charles (Devizes)
Tapsell, Peter


Higgins, Terence L.
Morrison, Hon Peter (Chester)
Taylor, R. (Croydon NW)


Holland, Philip
Mudd, David
Taylor, Teddy (Cathcart)


Hordern, Peter
Neave, Airey
Tebbit, Norman


Howe, Rt Hn Sir Geoffrey
Nelson, Anthony
Temple-Morris, Peter


Howell, David (Guildford)
Neubert, Michael
Thatcher, Rt Hon Margaret


Howell, Ralph (North Norfolk)
Newton, Tony
Thompson, George


Hunt, John
Normanton, Tom
Townsend, Cyril D.


Hurd, Douglas
Nott, John
Trotter, Neville


Irving, Charles (Cheltenham)
Onslow, Cranley
Tugendhat, Christopher


James, David
Oppenheim, Mrs Sally
van Straubenzee, W. R.


Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Osborn, John
Vaughan, Dr. Gerard


Jessel, Toby
Page, John (Harrow West)
Viggers, Peter


Jones, Arthur (Daventry)
Page, Rt Hon R. Graham (Crosby)
Wakeham, John


Jopling, Michael
Parkinson, Cecil
Walker, Rt Hon P. (Worcester)


Joseph, Rt Hon Sir Keith
Pattie, Geoffrey
Walters, Dennis


Kaberry, Sir Donald
Percival, Ian
Warren, Kenneth


Kellett-Bowman, Mrs Elaine
Peyton, Rt Hon John
Watt, Hamish


Kilfedder, James
Pink, R. Bonner
Weatherill, Bernard


Kimball, Marcus
Pym, Rt Hon Francis
Wells, John


King, Evelyn (South Dorset)
Raison, Timothy
Welsh, Andrew


King, Tom (Bridgwater)
Rathbone, Tim
Whitelaw, Rt Hon William


Kirk, Peter
Rawlinson, Rt Hon Sir Peter
Wiggin, Jerry


Kitson, Sir Timothy
Rees, Peter (Dover &amp; Deal)
Wilson, Gordon (Dundee E)


Knight, Mrs Jill
Rees-Davies, W. R.
Winterton, Nicholas


Lamont, Norman
Renton, Rt Hon Sir D. (Hunts)
Wood, Rt Hon Richard


Lane, David
Renton, Tim (Mid-Sussex)
Young, Sir G. (Ealing, Acton)


Langford-Holt, Sir John
Rhys Williams, Sir Brandon
Younger, Hon George


Latham, Michael (Melton)
Ridley, Hon Nicholas



Lawrence, Ivan
Ridsdale, Julian
TELLERS FOR THE AYES:


Lawson, Nigel
Rifkind, Malcolm
Mr. Spencer le Marchant and


Lester, Jim (Beeston)
Rippon, Rt Hon Geoffrey
Mr. W. Benyon.


Lewis, Kenneth (Rutland)
Roberts, Michael (Cardiff NW)





NOES


Abse, Leo
Bradley, Tom
Conlan, Bernard


Allaun, Frank
Bray, Dr Jeremy
Cook, Robin F. (Edin C)


Anderson, Donald
Brown, Hugh D. (Provan)
Corbett, Robin


Archer, Peter
Brown, Robert C. (Newcastle W)
Cox, Thomas (Tooting)


Ashley, Jack
Brown, Ronald (Hackney S)
Craigen, J. M. (Maryhill)


Ashton, Joe
Buchan, Norman
Cronin, John


Atkins, Ronald (Preston N)
Butler, Mrs Joyce (Wood Green)
Crosland, Rt Hon Anthony


Bagier, Gordon A. T.
Callaghan, Jim (Middleton &amp; P)
Cryer, Bob


Barnett, Rt Hon Joel (Heywood)
Campbell, Ian
Cunningham, G. (Islington S)


Bates, Alf
Canavan, Dennis
Cunningham, Dr J. (Whiteh)


Bean, R. E.
Cant, R. B.
Dalyell, Tam


Beith, A. J.
Carmichael, Neil
Davidson, Arthur


Benn, Rt Hon Anthony Wedgwood
Carter, Ray
Davies, Bryan (Enfield N)


Bennett, Andrew (Stockport N)
Carter-Jones, Lewis
Davies, Denzil (Llanelli)


Blenkinsop, Arthur
Castle, Rt Hon Barbara
Davies, Ifor (Gower)


Boardman, H.
Clemitson, Ivor
Davis, Clinton (Hackney C)


Booth, Albert
Cocks, Michael (Bristol S)
Deakins, Eric


Boothroyd, Miss Betty
Cohen, Stanley
Dean, Joseph (Leeds West)


Bottomley, Rt Hon Arthur
Colquhoun, Mrs Maureen
de Freitas, Rt Hon Sir Geoffrey


Boyden, James (Bish Auck)
Concannon, J. D.
Dempsey, James







Doig, Peter
Judd, Frank
Robertson, John (Paisley)


Dormand, J. D.
Kaufman, Gerald
Roderick, Caerwyn


Douglas-Mann, Bruce
Kelley, Richard
Rodgers, George (Chorley)


Duffy, A. E. P.
Kilroy-Silk, Robert
Rodgers, William (Stockton)


Dunn, James A.
Kinnock, Neil
Rooker, J. W.


Dunnett, Jack
Lambie, David
Roper, John


Dunwoody, Mrs Gwyneth
Lamborn, Harry
Rose, Paul B.


Eadie, Alex
Lamond, James
Ross, Stephen (Isle of Wight)


Edelman, Maurice
Latham, Arthur (Paddington)
Ross, Rt Hon W. (Kilmarnock)


Edge, Geoff
Leadbitter, Ted
Rowlands, Ted


Edwards, Robert (Wolv SE)
Lee, John
Ryman, John


Ellis, John (Brigg &amp; Scun)
Lewis, Ron (Carlisle)
Sandelson, Neville


Ellis, Tom (Wrexham)
Lipton, Marcus
Sedgemore, Brian


English, Michael
Litterick, Tom
Selby, Harry


Evans, Gwynfor (Carmarthen)
Lomas, Kenneth
Shaw, Arnold (Ilford South)


Evans, Ioan (Aberdare)
Loyden, Eddie
Sheldon, Robert (Ashton-u-Lyne)


Evans, John (Newton)
Lyon, Alexander (York)
Shore, Rt Hon Peter


Ewing, Harry (Stirling)
Lyons, Edward (Bradford W)
Short, Rt Hon E. (Newcastle C)


Fernyhough, Rt Hon E.
McCartney, Hugh
Short, Mrs Renée (Wolv NE)


Fitt, Gerard (Belfast W)
McElhone, Frank
Silkin, Rt Hon John (Deptford)


Flannery, Martin
MacFarquhar, Roderick
Sillars, James


Fletcher, Ted (Darlington)
McGuire, Michael (Ince)
Silverman, Julius


Ford, Ben
Mackenzie, Gregor
Skinner, Dennis


Forrester, John
Mackintosh, John P.
Small, William


Fowler, Gerald (The Wrekin)
Maclennan, Robert
Smith, Cyril (Rochdale)


Fraser, John (Lambeth, N'w'd)
McMillan, Tom (Glasgow C)
Smith, John (N Lanarkshire)


Freeson, Reginald
McNamara, Kevin
Snape, Peter


Freud, Clement
Madden, Max
Spearing, Nigel


Garrett, John (Norwich S)
Magee, Bryan
Spriggs, Leslie


Garrett, W. E. (Wallsend)
Mahon, Simon
Steel, David (Roxburgh)


Gilbert, Dr John
Marks, Kenneth
Stewart, Rt Hon M. (Fulham)


Ginsburg, David
Marquand, David
Stott, Roger


Golding, John
Marshall, Dr Edmund (Goole)
Strang, Gavin


Gould, Bryan
Marshall, Jim (Leicester S)
Strauss, Rt Hon G. R.


Gourlay, Harry
Mason, Rt Hon Roy
Summerskill, Hon Dr Shirley


Graham, Ted
Meacher, Michael
Taylor, Mrs Ann (Bolton W)


Grant, John (Islington C)
Mellish, Rt Hon Robert
Thomas, Dafydd (Merioneth)


Grocott, Bruce
Mikardo, Ian
Thomas, Mike (Newcastle E)


Hamilton, James (Bothwell)
Millan, Bruce
Thomas, Ron (Bristol NW)


Hamilton, W. W. (Central Fife)
Miller, Dr M. S. (E Kilbride)
Thorne, Stan (Preston South)


Hamling, William
Miller, Mrs Mille (Ilford N)
Thorpe, Rt Hon Jeremy (N Devon)


Hardy, Peter
Mitchell, R. C. (Soton, Itchen)
Tierney, Sydney


Harper, Joseph
Molloy, William
Tinn, James


Harrison, Walter (Wakefield)
Moonman, Eric
Tomlinson, John


Hart, Rt Hon Judith
Morris, Alfred (Wythenshawe)
Torney, Tom


Hattersley, Rt Hon Roy
Morris, Charles R. (Openshaw)
Urwin, T. W.


Hatton, Frank
Murray, Rt Hon Ronald King
Varley, Rt Hon Eric G.


Hayman, Mrs Helene
Newens, Stanley
Wainwright, Edwin (Dearne V)


Healey, Rt Hon Denis
Noble, Mike
Wainwright, Richard (Colne V)


Heffer, Eric S.
Oakes, Gordon
Walden, Brian (B'ham, L'dyw'd)


Hooley, Frank
Ogden, Eric
Walker, Harold (Doncaster)


Hooson, Emlyn
O'Halloran, Michael
Walker, Terry (Kingswood)


Horam, John
O'Malley, Rt Hon Brian
Ward, Michael


Howell, Denis (B'ham, Sm H)
Orbach, Maurice
Watkins, David


Howells, Geraint (Cardigan)
Orme, Rt Hon Stanley
Watkinson, John


Hoyle, Doug (Nelson)
Ovenden, John
Weitzman, David


Huckfield, Les
Owen, Dr David
Wellbeloved, James


Hughes, Rt Hon C. (Anglesey)
Padley, Walter
White, Frank R. (Bury)


Hughes, Mark (Durham)
Palmer, Arthur
White, James (Pollok)


Hughes, Robert (Aberdeen N)
Pardoe, John
Whitehead, Phillip


Hughes, Roy (Newport)
Park, George
Whitlock, William


Hunter, Adam
Parker, John
Wigley, Dafydd


Irving, Rt Hon S. (Dartford)
Parry, Robert
Willey, Rt Hon Frederick


Jackson, Colin (Brighouse)
Peart, Rt Hon Fred
Williams, Alan (Swansea W)


Jackson, Miss Margaret (Lincoln)
Pendry, Tom
Williams, W. T. (Warrington)


Janner, Greville
Penhaligon, David
Wilson, Alexander (Hamilton)


Jay, Rt Hon Douglas
Perry, Ernest
Wilson, Rt Hon H. (Huyton)


Jeger, Mrs Lena
Phipps, Dr Colin
Wilson, William (Coventry SE)


Jenkins, Hugh (Putney)
Prentice, Rt Hon Reg
Wise, Mrs Audrey


Jenkins, Rt Hon Roy (Stechford)
Prescott, John
Woodall, Alec


John, Brynmor
Price, C. (Lewisham W)
Wrigglesworth, Ian


Johnson, James (Hull West)
Price, William (Rugby)
Young, David (Bolton E)


Johnson, Walter (Derby S)
Radice, Giles



Johnston, Russell (Inverness)
Rees, Rt Hon Merlyn (Leeds S)
TELLERS FOR THE NOES:


Jones, Alec (Rhondda)
Richardson, Miss Jo
Mr. Donald Coleman and


Jones, Barry (East Flint)
Roberts, Albert (Normanton)
Mr. David Stoddart.


Jones, Dan (Burnley)
Roberts, Gwilym (Cannock)

Question accordingly negatived.

Amendment made: (i), in line 16, at end insert:
'(4) A disposition is not a transfer of value if it is made in favour of an illegitimate child of the person making the disposition and is for the maintenance education or training of the child for a period ending not later than the year in which he attains the age of 18 or, after attaining that age, ceases to undergo full-time education or training'.—[Mr. Nott.]

Clause, as amended, added to the Bill.

New Clause 8

RELIEF FOR WOODLANDS

'Schedule (Relief for woodlands) to this Act shall have effect for giving relief where the value transferred by a chargeable transfer made on death is determined by reference to the value of woodlands and the conditions mentioned in that Schedule are satisfied'.—[Mr. Joel Barnett.]

Brought up and read the First time.

Mr. Joel Barnett: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With it we shall also take new Clause 3 (Agriculture assets). I must inform the House that new Clause 8 refers to a new schedule which appears on page 688 of the Amendment Paper. It will, of course, be in order to refer to that schedule and to the amendments to it which have been tabled by hon. Members. Mr. Speaker has not had an opportunity of selecting these amendments, but the right of hon. Members to move amendments at a later stage will be preserved.

Mr. Barnett: The clause meets an undertaking I gave in Committee to provide a concession in relation to woodlands. I shall refer briefly to what is in the schedule without going into the detail which is normally involved in moving a schedule.
On death the value of the growing timber would be excluded, but it would be optional on the owner of that timber to do so. Then there would be certain conditions. First, the owner should have been beneficially entitled to growing timber for the five years preceding death. The second condition, which would apply only after 31st December 1975, would be that it must be part of a dedication scheme. Those are the basic conditions.
A third point is that the rate of tax in relation to woodlands will be the rate

or rates which would have applied on death. That is covered by paragraph 3 of the schedule. This seems a reasonable way of dealing with the matter given that we are agreeing to a considerable deferment of the tax, particularly in the case of hardwoods. There may be deferment of the tax for four or five generations.
I know that the Opposition would prefer us to go further, but our proposals go a long way to deal with the main problem. The Opposition's aims would create a situation in which owners of that particular type of asset would be in a vastly better position than most ordinary taxpayers. The case for woodland owners generally has been grossly exaggerated. Many incentives remain. First, there are grants under the dedication scheme. Then there is the way the tax system works for woodland owners. As the legislation stands, the woodland owner will be dealt with under income tax or corporation tax, and all his expenses in the years up to when the trees mature, since there would be no revenue receipt, would be allowed against other income, including investment income. This is a substantial incentive particularly for woodland owners.
When the trees come near to maturity there is frequently a switch to Schedule B, and no income tax or corporation tax is paid at all.
There is then the question of capital gains tax. We have also been told constantly that there is a substantial hedge against inflation. Those are quite substantial incentives without putting in, as hon. Gentlemen seek to do, the old estate duty relief, which was a substantial bonus on top of the already substantial existing incentives. The bonus of the estate duty relief, as hon. Gentlemen who are objective about these matters will know, was enormously abused, and the abuse was growing on a substantial scale. Investment companies were offering woodlands to wealthy taxpayers on their deathbeds. That was of no help to the genuine woodland owners.
Under the clause we have excluded that type of operation by insisting that there shall be five years' beneficial ownership before the clause operates. Any reasonable hon. Member would regard that as a sensible way of dealing with the matter. In that way we give relief


where it is intended and exclude it from the place where I hope even Opposition Members would not wish to give it.
Perhaps I can say to some of my hon. Friends who have been concerned with this—[HON. MEMBERS: "Where are they?"] They will come. When they hear about some of the things we are likely to hear from Opposition Members they will pour in. I can tell my hon. Friends that the Trades Union Congress strongly opposed even the relief we are giving. I apologise to the TUC, but I believe that the clause is reasonable and that the relief we are providing will help genuine woodland owners. I am very fond of trees. Anything we can do to help genuine woodland owners, we are happy to do. That is why the clause is being introduced.

Mr. A. J. Beith: The genuine woodland owners, through their representatives, have repeatedly approached the Revenue and Treasury about ending precisely the abuse to which the hon. Gentleman is referring. Both they and the forestry workers are genuinely concerned to see that the end result of the process is something which will enable planting to continue.

Mr. Barnett: That is precisely what we are doing under the clause. I look forward to having the support of the hon. Gentleman and his hon. Friends. The genuine foresters will have a fair deal. One should not go further than that, because one has to bear in mind the majority of other taxpayers who will pay capital transfer tax on their assets. Therefore, it would be to go much too far if we went as far as some of those who made representations to us want to go. I hope that the hon. Gentleman, being a reasonable man, will accept that. I am glad to see him assent.
A number of amendments to the schedule have been tabled. I imagine that when we come to it some hon. Gentlemen will wish to speak to them. I shall be happy to deal with those and the new clause on agricultural assets when I have heard the remarks which I am sure one or two hon. Members will wish to make on behalf of their constituents. I hope that my hon. Friends will support the new clause and the schedule when we come to it.

Sir David Renton: On a point of order, Mr. Deputy Speaker. There appears to be a misprint of a rather mystifying character in the first line of the new clause, as originally tabled. In it we find the unusual word "haze". I do not know whether in this connection it should be "axe" or whether it is due to some kind of illiteracy which is not usually to be expected even on the Government side.

Mr. Deputy Speaker: It has probably been influenced by the fact that we are dealing with trees, and axes are used for cutting down trees. The printer's mind was probably on "axe". I am sure that the right hon. and learned Gentleman knows full well what is meant.

9.15 p.m.

Mr. Francis Pym: I wish first to speak to new Clause 3, in the names of my right hon. and hon. Friends and myself.
I declare an interest both as a landowner and as a tenant. The first request I make of the Government is whether it is possible for the Minister of Agriculture, Fisheries and Food to be present to hear the debate this evening. I am glad to see that the Parliamentary Secretary is present. He has made some comments in public about the capital transfer tax, but his right hon. Friend the Minister has been strangely silent about it. I wonder what is the right hon. Gentleman's attitude to this tax. With many of my hon. Friends and other hon. Members, I should like the Minister himself to reply to the debate and to speak as the leader of the industry for the time being. I regret that he is not here tonight.
The Chief Secretary has an altogether too glowing opinion of the new schedule which he referred to in relation to forestry. I do not propose to speak about forestry in detail since, as you have said, Mr. Deputy Speaker, this falls to be debated on Monday, but my hon. Friend the Member for Ludlow (Mr. More) may catch your eye later this evening.
The new clause is designed to bring to agriculture a measure of genuine relief that does not exist in the Bill at present. The effect of the tax as it stands on farming will be immensely serious unless it is mitigated in a reasonable and fair way. It is a devastating imposition on many


thousands of families who are amongst the hardest working families in the land. What is more, these are the people who are engaged in the most primary of all activities—the production of food. Apart from the war years, there never has been a time when their enthusiasm was so much needed as it is now.
The tax hits farming hard because of the nature of the industry. It is highly capital-intensive with an ultra-low level of return. It consists of thousands of diverse units each of which is extremely valuable because of the value of the land. That land cannot be realised by sale without destroying the viability of the farm as a business. The wealth exists on paper and is "locked in" as an indispensable part of the activity.
All Governments, of both parties, until the present one have thought it good economic sense to move towards larger units. Our success in this is one reason why British agriculture is amongst the most efficient and productive in the world. That has been achieved in part by recognising the unique wealth aspect of land and making special provision for it in land capital taxation.
At least the Chancellor acknowledges in principle that agriculture ought to have some relief. To that limited extent there is common ground between the Front Benches. But the relief that the Chancellor proposes cannot properly be described as relief. It is wholly inadequate, to the extent that I can only describe the effect of the tax as naked confiscation. We are asking the Chancellor to make the relief adequate and sensible. Unless he does so, the result will be to decrease the production and productivity of farms. The burden of the tax on the assets of farms will be far too heavy. Farms will have to be fragmented, the opposite course to the one which has made our agriculture so efficient. Who will buy the fragments? How will they be farmed? I reckon that the tax is enough to set our agriculture back on a course that could lead to the peasant type of agriculture which is such a problem in certain parts of Europe.
The Parliamentary Secretary to the Ministry of Agriculture has a pathological mental blockage about anyone who possesses land, whether or not he farms it. The rural economy of the country is based on the family unit. This tax is

nothing less than a threat to that whole structure. No other structure could work anything like as well. It is the very character and independent mind of our farming families that is the heart and strength of our agriculture. The Parliamentary Secretary said in Scotland in January:
it is ludicrous to argue … that the application of the capital transfer tax to land represents a threat to the level of food production in this country.
He is wrong. It does represent such a threat, unless the tax is adjusted to take account of the unique circumstances.
As time is so limited I shall list only three inadequacies of the so-called relief as the Bill now stands. First, the multiplier of the rental value is too high at 20. When the Bill was drafted, values were relatively high and rents relatively low. The position is already different today, with the result that in many cases 20 times the rent is the same as or even higher than the capital value. At least the Government recognised in Standing Committee that the rate of 20 will have to be changed from time to time. We are grateful for that. But is it not ominous that in the conditions now prevailing there is no Government amendment to reduce the multiplier? It most certainly should be reduced. Are the Government's proposals to alter the rate by order a means only of putting it up? In view of what is happening to values and rents it should go down now. If ever there was a case to put it down, that case now exists. I am deeply suspicious of the fact that the Government, having recognised the need to change, have not responded to the circumstances that now exist and will not put it down now.
Secondly, the relief, such as it is, does not apply to let land. The tenant is no less worthy of relief than the owner-occupier. The Chancellor of the Exchequer and the Chief Secretary have not so far justified the exclusion of tenants from some measure of relief. There is no provision in the Bill for alleviating the tax load on working capital on livestock, crops and machinery. The average requirement today is about £120 per acre. Therefore, enormous sums are involved. My hon. Friends and I believe that there is an overwhelming case for giving appropriate and full relief to working capital as well as to land itself.
The third inadequacy is that that there is a very important element of continuity between generations of farming families. That applies to other business, but especially to agriculture. That is basic to the whole way of life in the countryside. I am convinced that it is fair and civilised to make sure that handing on continues to be possible, and to make it financially practicable for a farmer to hand over his farm to his widow, son or near relative before or after death without placing an intolerable burden on them which will have a deleterious effect on the possible production of food from that farm. The Labour Party loves to think of itself as compassionate. It has not shown compassion here; it has shown the jackboot.
I shall not continue to list the weaknesses and dangers of the Bill as drafted. I could talk at length about the relief that is necessary from the multiplicity of other taxes, the need for relief for quick succession and the need for more favourable terms for payment by instalment, but my right hon. and hon. Friends have tabled the clause to bring a straightforward and genuine relief to people whose life is on the land.
It seems that it was the original intention of the Chancellor to create relief, and that his intention was not so widely different from the 45 per cent. relief that operated before. Maybe the relief was not to be so great, but in principle the intention was not so different. However, if that was his intention he has signally failed to achieve it.
The Parliamentary Secretary, in the speech to which I referred a short while ago, said:
let me stress that … the Government is concerned that the capital transfer tax should not adversely affect the real interests of the agricultural and forestry industries.
I must tell him that as it exists in the Bill it adversely affects the real interests of both those great industries.
It is wrong that on a debate on a tax which will have such a devastating effect on agriculture the Minister of Agriculture, Fisheries and Food is not present. He has not shown any inclination, either in public or in the House, to express any opinion about the effect of the capital transfer tax. That is a dereliction of his duty. I am sorry to criticise him when

he is not here, but I had reason to assume that he would be present. Further, no Minister from the Scottish Office or the Welsh Office is present. I make these comments with no offence whatever to the Chief Secretary. We know his competence and versatility, but the Minister of Agriculture, Fisheries and Food is the present political leader of agriculture and I wish he were here. I believe that he was in the House earlier this afternoon and he may well be here now. The House is entitled to have the right hon. Gentleman's presence during a debate of such importance relating to food production.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Gavin Strang): The right hon. Gentleman is making rather a meal of this. [HON. MEMBERS: "No."] He cannot fail to be aware of the deep interest which my right hon. Friend has shown in this matter and the discussions he has had with interested parties. [Hon. Members: "Where is he?"] I can assure hon. Members that I am representing my right hon. Friend because he wholeheartedly supports the decision of the Government on this matter.

Mr. Pym: I do not think I am exaggerating things in any way. If the Minister supports it he has never justified this in public. He has never put forward an intellectual case to justify it in terms of agriculture and forestry. He should do that tonight in the execution of his duties. However, he is not present. I make no criticism of the Chief Secretary.
We believe that it is vital to have a thriving and productive farming industry, and, therefore, I commend the new clause or one similarly drafted.

Dr. Colin Phipps: I declare a dual interest. I own a farm and woodland. I, too, have strong reservations about the new clause. I believe that it is not sufficiently stringent.
A number of problems are associated with affording relief to farmland, not least of which is that if relief is granted the effect is that it will become another source of tax avoidance for wealthy people. The price of farmland will increase and will be out of the reach of the very farmers about whom the right


hon. Member for Cambridgeshire (Mr. Pym) is making so much fuss. Even with the relief that might be afforded, the new land prices will mean that the farmer will be faced with raising the same amount of capital to pay the tax.
There is a sharp distinction between the ownership of land and the farming of land. What takes place on the land gives it its importance, not the ownership of the land. The problem with the new capital transfer tax is that it is only 50 per cent. If it is 20 times the rent it may be somewhat less than that. Farmland in many cases is an indivisible asset. This means that a farmer may have to sell something. The solution is obvious. We make the tax 100 per cent. In that case the whole farm goes to the State, thereby avoiding problems.
I have no objection whatever to the farmer's son getting the tenancy of the farm from the State. In that way we would continue this magnificent family tradition about which the right hon. Gentleman is so enthusiastic, and the State would get the farm. Ultimately there would be larger and larger farming units, thereby fulfilling yet another of the wishes of the right hon. Gentleman.

Mr. Hamish Watt: Would the hon. Gentleman not agree that the last man who tried that was Stalin?

Dr. Phipps: We must not make comparisons between Stalin and my right hon. Friend. I appeal to my right hon. Friend and to the Chancellor to look again at this clause to see whether we cannot make a special concession and have a 100 per cent. tax.

9.30 p.m.

Mr. Hector Monro: The hon. Member for Dudley, West (Dr. Phipps) made such an asinine beginning to his speech that I will not follow him.
The Minister gave an assurance in the latter part of January that he would look at this again. It is singularly disappointing that he has come forward with such an amendment. It does not begin to fulfil our expectations.
There are some areas of agriculture which the Minister must re-examine. First, there is the multiplier, which was referred to by my right hon. Friend the Member for Cambridgeshire (Mr. Pym).

The Chief Secretary must accept that the multiplier, if it is to exist at all, should be flexible. Secondly, he must look again at the relief for tenants' assets. He does not begin to understand them—and he certainly will not understand them if he does not listen. While he is having a little conversation with his hon. Friend, perhaps I may remind him that we Scots are particularly dissatisfied with the fact that the Secretary of State for Scotland is not present for this debate. In an important debate on agriculture and forestry we expect the two responsible Ministers to be here to listen, particularly when we know that both are present in the House. If they have something more important to do, we should like to know what it is.
I believe that the Minister has given no worthwhile concession. It is almost incomprehensible that the right hon. Gentleman the Chief Secretary will not listen to advice which he seems to seek. He said that he had representations from the excellent Forestry Action Group, but he has not followed what the group told him. Perhaps he will say in his reply what advice the Forestry Commission gave him in recent months. It would certainly be interesting to know. I have a very good idea that the commission's thinking is very much more on the lines of the Opposition's thinking than the Government's thinking.
We all know that forestry is a long-term investment. However, it appears that the Government are setting out to destroy it. Unless they listen to sense tonight, they will succeed—and I do not think it is a success which they really want to achieve. The results of Government policy will be devastating, and particularly to the Minister's Department. We pressed upon the right hon. Gentleman in Committee at the end of January that the escalation of imports of timber will increase even further as our forestry industry begins to reduce its output in the years ahead.
Many of us have many worries about unemployment in the industry. There has been active lobbying by foresters not only in our constituencies but also in the House of Commons. We sought to explain in Committee the effect which the tax will have on employment in the forests, particularly in regard to foresters and haulage and saw mills workers. It will also


have its effects in the chipboard industry and in other ancillary trades. I explained in Committee that a fifth of my constituency was under afforestation. If planting is to be reduced in future, I can see substantial unemployment developing in the rural areas. Will the Minister take responsibility for rural depopulation in the years to come? What will happen to houses and schools built in the forestry areas? We impressed on the Government in Committee that the tax will affect the social lives of people in the rural areas. Yet the Chief Secretary has produced the most mini-amendment to meet this situation. He believes that he has made a major concession but he must be alone in that view in the House, with the exception of a few hon. Friends now behind him on the Labour benches.
The tax on final sale value will more than cancel any benefit which might accrue from deferment of tax. In any event the Chief Secretary has set the tax at the top rate, which is far too high. We have already told the right hon. Gentleman that planting this winter has been ruined. About 30 million fewer trees than normal have been planted this winter. Does that not register with the right hon. Gentleman? It does not appear to do so.
The Chief Secretary must understand that if we want to retain a viable forestry industry, private woodlands and Forestry Commission activities must be complementary. They both go forward together. The Government must see reason and accept a suitable amendment to the Bill now, or certainly by the end of the Report stage.
Why has the right hon. Gentleman included dedicated woodlands only? Will he explain why he came to that surprising conclusion? Will the individual forester have the right to choose whether or not to enter the dedication scheme in the future? Will he say why he underestimates the importance to farming and forestry of the concessionary relief of 45 per cent. which has proved so satisfactory in the development of woodlands in the past? It is not the reason which he gave, since he knows that forestry yields a low return on capital investment, perhaps of the order of 3 per cent.
The Government should give more incentives for the planting of timber and

the expansion of the forestry industry in the years ahead. Instead, they hammer away at this industry. If that policy continues there will be serious consequences for Britain, not only for this generation but for several generations ahead. Why is the Minister destroying that industry by means of his fiscal foolhardiness?
I ask the Minister to think again between now and Monday. This is a vindictive tax imposed by a Socialist Government who are legislating for unemployment in the rural areas, for rural depopulation, and for further balance of payments deficits in the years ahead. The Government's position is intolerable. I totally oppose this amendment as regards forestry and the subsequent amendments which deal with farming.

Mr. Peter Hardy: I was surprised at what the right hon. Member for Cambridgeshire (Mr. Pym) said. I assumed that he would advance cogent and detailed arguments, instead of which he devoted most of his time to bemoaning the fact that my right hon. Friends were not present. If my right hon. Friend the Minister of Agriculture had been present, the right hon. Gentleman would doubtless have produced his other speech out of his pocket, complained about the Minister wasting time and suggested that he should have discussed the importation of eggs, despite the fact that fewer eggs were imported in January 1975 than in January 1974—a fact which seems to have escaped the memories of the Opposition.
A number of Government supporters who are concerned with and slightly informed about forestry believe that during the next 20 years this country will have to maintain a considerable planting programme. I do not mind whether that programme is carried out by the Forestry Commission or by the private sector. However, I am convinced that that programme must be maintained. I have the real anxiety that if the Treasury persists with its public expenditure policy the Forestry Commission will not have the resources to make up for any decline in the private sector. Clearly the Report stage of the Finance Bill is not a time to discuss implications of this kind. [Interruption.] I frequently spend my holidays in Scotland. I am fond of the Scottish people. I should like to remind


the Opposition that trees grow in England and that we are entitled to talk about English trees.
It is appropriate for the Chief Secretary to be concerned with the long-term implications of public expenditure. If the worst prognostications of the hon. Member for Dumfries (Mr. Monro) are realised and there is a continuing decline in tree planting in this country, it seems to me that a radical reappraisal of public expenditure policy will be required, because the need for timber will be greater in 10 years' time than it is now. That need has grown alarmingly in the last decade, and I am anxious that we should maintain timber production.
My right hon. Friend has spent a little time in recent weeks looking at this matter, despite the fact that the Opposition have sought to waste time in the House and in Committee with long, protracted and unnecessary debates largely involving debating points of the kind we have heard from the right hon. Member for Cambridgeshire when there were serious aspects to consider.
It would be wrong to look in detail at many of these matters now, but I ask my right hon. Friend whether he will be prepared to look carefully at the situation in agriculture in general and in forestry in particular and to watch how the situation unfolds. If it is clear that the balance of payments will be affected adversely, that tree planting in Britain is to be reduced and that the production of food is not to be maintained at the highest possible level, I hope he will bring forward in the next Finance Bill—we seem to have Finance Bills reasonably regularly—the necessary amendments to the law which will ensure that the country grows as much timber and food as it can.

Mr. J. Grimond: The hon. Member for Rother Valley (Mr. Hardy), who spoke with good, robust, English nationalism, talked a great deal of sense about the necessity to watch the outcome of this Bill.
I remind the hon. Member for Dudley, West (Dr. Phipps) that we have experienced an increase of 100,000 since 1973 in the number of local government employees under Conservative local govern-

reform and that we do not want another 100,000 bureaucrats to run the land under Socialism.
The people in the North of Scotland are deeply attached to their land, and this is a very important factor in the whole situation. They have fought to retain it against landlords and Governments. They do not intend to be turned off it now by legislation which may suit England but which may have unforeseen effects in the North.
I do not, however, take quite so pessimistic a view as was expressed by a number of earlier speakers. But since this is a brief debate, I shall not rehearse the arguments. I want to hear the Government's comments about the multiplier. The right hon. Member for Cambridgeshire (Mr. Pym) made a very good point when he said that in the present economic situation we know too little about what the effect of the multiplier will be.
We are anxious to keep some land available to tenants. There is a severe danger that virtually no land for tenants will come on to the market at a reasonable cost. Investment in land drives it out of the reach of many people, especially of families who have lived on the land for generations and wish to remain there.
In the North of Scotland agriculture is very different from what it is in various other parts of the country. What is more, there are great variations in the area. It is divided into small crofts, large estates and, in Orkney, dairy and arable farms. Have the Government consulted the Crofters Commission about possible repercussions from this legislation? We are hoping to have crofting legislation introduced in the not too distant future. We hope that nothing in the present legislation will prejudice the desirable reforms which we hope to see made.
We still have the figure of 1,000 acres in the legislation, which represents an enormous farm in the South. It is a different situation in hill country. However, I do not believe that this with its restricted application will in itself now be a serious limitation on the concessions made to agriculture.
I do not wish to delay the House. I have serious reservations still about the effects of this Bill in a highly inflationary


situation in which the cost of working capital and everything else are constantly increasing. It is impossible to sell part of a farm without ruining the whole holding. The situation in farming is totally different from that involved in other forms of capital. I hope that we shall keep continuity of local people on the land. Although I accept that the Government have gone some way to meeting our fears when the Bill was first introduced, there are still a number of criticisms to be made.
I hope that the Minister will comment on some of the matters which I have raised.

9.45 p.m.

Mr. Watt: Is this country really in an economic crisis? Were we really short by £4,000 million last year? If so, is it not time that the country faced the situation and did something tangible about it? Looking at the books, we find that no less than £2,000 million of that deficit came from imports of timber and timber products. Yet we have hon. Gentlemen opposite screaming tonight because one or two companies appear to be making some profit from trees.
There is no profit in a tree until it is cut. Until the woodman cuts that tree there is no true profit in it. The value begins when the tree is cut and manufactured.
Does it matter who grows trees in this country as long as trees are grown? The important thing is for us to have a green revolution. We must grow our way out of this crisis. We must grow a percentage of that £2,000 million. Only 8 per cent. to 10 per cent. of our timber requirement is produced in this country. Therefore, why should we scream when one or two forestry companies plant trees? Let us get things in perspective, if we can.
I do not wish to spend any more time on forestry. I want to move to agriculture. Hon. Gentlemen opposite are unbelievably naïve when it comes to agriculture. I suggest that, looking at the scale set by the Government for the application of capital transfer tax, the amount of money that will be milked out of the industry, which has already been squeezed dry, will cripple it entirely.
The harsh reality of present-day agriculture is such that the income derived from the average farm in Britain is so low that the farmer cannot afford to pay a worker to help him. He has to rely not only on what casual workers he can find in the district, but, even more, on the hard work of his own family to keep going. The level of profitability in agriculture is so low that his business does not generate sufficient capital to pay income tax, let alone capital transfer tax.

Mr. Dennis Canavan: Does the hon. Gentleman agree that on a train journey from Glasgow to London about two or three weeks ago he and I had a long discussion about the effect of capital transfer tax on agriculture in which he said that he was wholeheartedly behind the Labour Government's proposals for capital transfer tax as it affected agriculture?

Mr. Robin Maxwell-Hyslop: On a point of order, Mr. Speaker. Is it not totally contrary to the traditions of this House ever to raise in debate what purport to be private discussions outside?

Mr. Cryer: Further to that point of order, Mr. Speaker. Do not the scenes during the past few days, when democratic procedures in this House were brought to a standstill, indicate that some of the traditions followed by the Opposition are not worth a penny?

Mr. Speaker: I am dealing with the question of private conversations. It is not in accordance with the convention of the House that private conversations should be quoted.

Hon. Members: Withdraw.

Mr. Canavan: I withdraw, Mr. Speaker.

Mr. Watt: I will ignore that intervention and repeat what I said. The level of profitability in agriculture today is so low that the business does not generate sufficient capital to pay income tax, let alone capital transfer tax. Any young relative who may take over a farm usually has such a tremendous burden of debt round his neck that it takes him all his time to screw up the courage to make a start. I know, because I have


been in that situation. If there is to be capital transfer tax on top of an already crippling burden, I assure the House that most young men will not bother getting started.
The Scottish National Party, throughout the passage of the Bill, has sought to educate the Government to the fact that the average family farmer is no financial wizard, although many hon. Gentlemen opposite may think so.

Mr. Nicholas Fairbairn: Am I not right in recalling that during the Second Reading debate the hon. Lady the Member for Moray and Nairn (Mrs. Ewing) said that the SNP came into the Chamber to support the CTT?

Mrs. Winifred Ewing: I am with the distinguished Lady the right hon. Member for Finchley (Mrs. Thatcher), who is now the Leader of the largest Opposition party in England, but not in Scotland, in saying that I am for CTT in principle but not this particular tax unless certain important reservations are made for forestry, fishing, small businesses and farms.

Mr. Speaker: I hope that hon. Members who have the Floor will not give way to let other hon. Members make speeches.

Mrs. Ewing: I was answering the point made by the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn). It was not my fault.

Mr. Watt: Thank you, Mr. Speaker. I must impress upon the Government that the average farmer today is overworked and underpaid, and the only thing that keeps him going is the hope that one day he may be able to hand over his land, his livestock that he has bred and his dead stock—not the fancy names that are used here—

Dr. Phipps: Will the hon. Gentleman give way?

Mr. Watt: No. Farmers today are prepared to carry on only because they know that, as of now, they can hand over their farms in some degree intact to those who come after them. If the act of handing on their heritage is to be

brutally taken from them and brutally taxed, the last incentive will have gone.

Dr. Phipps: Will the hon. Gentleman give way?

Mr. Watt: No.

Dr. Phipps: Will the hon. Gentleman give way?

Mr. Speaker: Order. The hon. Member for Banff (Mr. Watt) is not giving way. The hon. Member for Dudley, West (Dr. Phipps) must resume his seat.

Mr. Watt: I cannot warn the Government too strongly that if they insist on pushing through this crippling Bill they will damage for ever the one section of our agriculture industry which they should be preserving.. I hold no brief for landlords or for large multiple farmers, many of whom are represented by Members on the Conservative benches. I speak strongly for the average family farmer, and I ask the Government to take back the Bill and bring forward a CTT that will be reasonable.
I ask the Government to accept the amendment in the name of my hon. Friend the Member for Perth and East Perthshire (Mr. Crawford) and give relief for 75 per cent. of the value of the land, the livestock and the dead stock which farmers hand over before attaining the age of 60. This should apply to men who farm land in the following categories, and I categorise them by acreage, not by value. Values are constantly changing. Acreages do not change. Therefore, as exemptions from capital transfer tax, I suggest the following scale: hill farmers who have 2,000 acres or under; animal farmers who have 300 acres or under; and dairy farmers who have 250 acres or under.
It will be appreciated that I am in no way defending the large landlords or the multiple farmers. The country is in grave economic crisis. That being so, why do the Government not let agriculture play its full part in trying to produce some of the £1,600 million-worth of temperate foodstuffs that could and should be grown in this country? That amount of food must be grown, but the extra production demands extra capital. What farmer will take the trouble of finding extra capital if he knows that that capital


will be brutally penalised by the capital transfer tax?

Mr. Parker: I should like to support what was said by my hon. Friend the Member for Rother Valley (Mr. Hardy) on the whole question of forestry. I am sorry that my hon. Friend did not go a little further in what he said on the matter. I have always found the Treasury a strong opponent of any expansion of forestry, and I am sorry to see that that condition continues to a considerable extent.
We must face the fact, with the world as it is today, that a union of Russia, Finland, Sweden and Canada controls timber prices. They are in exactly the same position as regards timber as are the oil sheikhs regarding petrol. They have pushed up the price of timber products enormously already. At any time they could do so again.
Let us face the fact that in the world as a whole there is likely to be a growing shortage of timber and a growing demand for it. We should therefore be supplying more for ourselves. I should have thought that the Government ought to be thinking further ahead and ought to have a production programme. As I have said previously, we ought to have at least another 1 million acres planted by the end of the century. We shall not get that done wholly by the Forestry Commission. The Government will not find the money for that purpose. There must be a union of private money as well as Government money to achieve such a programme. There is an enormous amount of land, particularly in Wales and Scotland—and the hilly areas generally—which is not used to full advantage and should be planted up and made productive.
We therefore want to encourage a certain amount of capital to be put into doing that. This means that there must be an adequate return on that capital to attract it. I shall not labour that point further at present beyond saying that there are many people concerned with private forestry who feel strongly that their interests are greatly hit by the Government's present proposals. I hope that some attempt will be made to look at their arguments reasonably and responsibly.
I should like to make a suggestion. The Forestry Commission is not only a body that produces timber. It does the research for timber. It is the body which represents the whole of the timber interests of the country in discussions with the Government. Could not the Government ask the Forestry Commission, in that capacity, to look at the case put up by private foresters and make a report to them—and, let us hope, to the House as well—about what should be done to try to improve production by private forestry? That is a way out of the difficulty.
If the Government could accept an inquiry of that kind and we could know the results, we could see whether, when the next Budget comes along—which will be quite soon—the results could then be implemented. I hope, therefore, that the Government will look at this matter in this light and ask the Forestry Commission to look at the case of the private foresters and report to them and to the House.

Mr. Jasper More: Not having been able to participate in the debate in Standing Committee, I feel that my first duty when speaking on forestry at this stage of the Bill is to pay tribute to those colleagues who fought the battle on forestry night and day in Standing Committee, and that tribute includes hon. Members on both sides of the House. I have read those debates closely. I am bound to say that I find no evidence of the motivation for tax avoidance in forestry which seems to obsess the Chief Secretary.
Speaking on behalf of the Forestry Committee of Great Britain, which represent the forestry owners—

It being Ten o'clock the debate stood adjourned.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's Sitting, the Motion relating to Financial Assistance for Industry (Norton Villiers Triumph Limited) may be proceeded with, though opposed, until Three o'clock or three hours after it has been entered upon, whichever is the later.—[Mr. Pavitt.]

FINANCE BILL

Question again proposed.

Mr. More: —in England and Scotland, I should like to say that not only has it tried in the past to have talks with the Inland Revenue on the question of alleged tax avoidance but it also positively welcomes the five-year rule which has now been proposed as a means of putting an end to death bed purchases.
It would be ungracious not to acknowledge that there has been some response from the Government in the form of the new clause and schedule which have appeared on the Notice Paper. At the same time, it would be hypocritical not to say that the Bill as originally presented was an outrage to the forestry industry.
It would be untrue to say that the clause and schedule now presented go any appreciable way towards removing this evil. The clause has a title to the effect that it is a relieving clause. This at once raises the question, as it appears to affect only cases of transfer on death, whether it is intended that transfers in life should remain under the main charging provisions. If this is so, surely the clause is immediately at fault in inhibiting such transfers and ossifying the private forestry industry.
The Government measures are apparently directed against owners. The Chief Secretary must realise that the real victims of this will be all sections engaged in the private forestry industry and, most of all, the forestry workers. I have had letters from the Economic Forestry Group, the Woodland Management Association Limited, the Flintshire Woodlands Limited, and the Association of Professional Foresters. The Association of Professional Foresters, together with the British Foresters Action Group, represents about 10,000 workers employed in the forestry industry.
The Chief Secretary should hear just one or two things that the Association of Professional Foresters has said in a letter to myself which arrived this morning:
the grossing up principle
which is inherent in the capital transfer tax
will place a very high tax burden on woodlands. However, by far the most … disastrous

principle appears to have been … that the tax will be assessed on the sale value of the timber. … Inevitably therefore, all future forestry will take place on a short term rotation … those people who derive their livelihood from the private sector of British forestry are likely to lose their jobs, and also cause heavy depopulation in the rural areas … the traditionally long term hardwood rotation will cease and be succeeded by soft woods on a short term rotation. There will be no replacement of long term hardwood woodlands such as areas of Beech, Oak, etc.…
We trust that you will find time to try to ensure that the livelihood of those employed in forestry is safeguarded and that the future landscape of the country is protected.
It is clear from the clause and the schedule that many of the practical implications have not been thought out. The 45 per cent. relief on agricultural land which hitherto has been available also for forestry land has been lost. No alternative form of relief has been substituted. It is surely reasonable to ask that as long as land remains committed to forestry it should receive the same treatment for capital transfer tax purposes as the trees grown thereon—that is, that it should be left out of account in determining the value transferred on death and tax charged only if and when it is sold.
Nothing has been considered, apparently, with regard to underwood. This has never been subject to estate duty. It is now to be made liable to the tax. The deductions allowable from the proceeds of sale are considerably less generous than those which were permitted in the case of estate duty.
The clause appears to cover only the case of woodlands owned by individuals and not to deal with trusts and companies. There is no mention of the things which are bound to happen in forestry, mostly windfalls and losses resulting from windblows. It has been suggested that the new clause appears to relieve only dedicated woodlands. This is surely nonsense in a fiscal context. Whatever the advantages of dedication, it is surely nonsense that the existence or not of dedication should determine a liability to tax. Quite apart from other considerations, the main object of the dedication scheme has always been the use of the land for timber production. It is the land—not the trees—which is dedicated. Many amenity woods, small woods,


copses, and all hedgerow and park timber have been deliberately kept outside the scheme. The trees and woods involved account for about 29 per cent. of all privately-owned timber, and for 37 per cent. of all hardwoods growing in Great Britain.
Unless such timber is to be penalised as regards capital transfer tax, with disastrous consequences for the appearance of the countryside, the rules of the dedication scheme will require substantial modification, and all restrictions on what can and cannot be dedicated will have to be lifted. Whether this is practicable, whether it will be welcome to the Forestry Commission as the authority responsible for the administration of the scheme, and whether the scheme will benefit as a result are all open questions.
I come to the major objections which have already been referred to in the letter which I read from the association representing forestry workers. There are two main objections—first, the question of the basis of value on which the tax is to be paid, and, secondly, the question of the rate at which the tax is to be paid. As regards the basis of value, it is proposed that the deferred tax should be chargeable not on the value of the trees at the time of death but on the proceeds of their eventual sale. The latter value, due to the growth of the trees in the interval, could be anything up to 10 or more times higher than the former. It is thus the intention to tax values which to a greater or lesser extent will have been non-existent at the time when the transfer took place—that is, at the date of death.
This is patently unjust and contrary to the principles of the capital transfer tax, and will place on forestry a tax burden suffered by no other industry. There is no comparison with the objects dealt with in Clause 31, which can be left out of account in determining the value of the transfer on death, but in the case of which, if they are subsequently sold, the proceeds of sale rather than the value at death become chargeable to tax.
The second question is the rate of duty. This is the second serious short-

coming in the Government's new clause; namely, the proposal to charge the tax on the proceeds of eventual sales at the rate applicable to the top slice of the estate transferred on death.
I take it that there can be three ways in which the rate could have been fixed. It could have been done by reference to the average rate on the main estate. It could have been done by assessment on the timber as a separate estate, or it could have been done at the highest rate of the main estate. The Government have chosen the third and most onerous of those three methods.
The extraordinary situation could arise, as a result of these Government proposals, that in cases where woodlands are divided and left to more than one individual, the felling or selling decisions of any one of the beneficiaries will affect the capital transfer tax liability of the others.
I sum up in this way the case which the Government must accept before this tax passes into law. In view of the nature of the tax, the only just basis for levying it is on the value at the date of transfer, and in these circumstances the simplest and fairest method for dealing with the problem is to treat the timber as a separate estate but without the benefit of the £15,000 exemption limit.

Mr. Norman Buchan: On a point of order, Mr. Speaker. I am curious to know what is happening. Are we listening to a speech from the hon. Gentleman, or is he reading a brief prepared by someone else?

Mr. Speaker: That is not a point of order.

Mr. More: I hope that the Chief Secretary will give us the views of the Forestry Commission on what the Government have proposed. If tomorrow or on Monday we come to discuss the new schedule which has been put down, and if Mr. Speaker looks favourably on some of the amendments thereto, the Chief Secretary will, I hope, understand that there are several issues, including those to which I have referred, which we shall wish to raise again.

Mr. Sedgemore: I found the response of my hon. Friend the Member for Dudley, West (Dr. Phipps) to the Opposition's new Clause 3 most refreshing. I am sure all will agree that my hon. Friend is someone who could be described as a typical British farmer, and he called for a 100 per cent. tax, which would, incidentally, have the effect of giving the lands back to the people.

Mr. Fairbairn: Is not the hon. Gentleman capable of distinguishing between the people, who are human beings, and the State, which is not?

Mr. Sedgemore: I should have expected that suggestion to bring delight to the faces of hon. Members on the Liberal bench, but I imagine that Lloyd George is now turning in his grave at the response of the right hon. Member for Orkney and Shetland (Mr. Grimond).
New Clause 3 should be rejected because it does not take account of a number of reliefs already granted by the Treasury in respect of both farmers and small businesses. The Opposition will recall the announcement that the rates of tax on transfers during life were halved on transfers up to £100,000, and they were reduced by one-third on transfers up to £250,000. That was done in part specifically to help small farmers and small businesses.
Second, the Opposition will remember that the Treasury introduced an amendment to reduce the value upon which the tax is charged to farmers by the introduction of the multiplier of 20. Third, owner farmers are helped by the Treasury's proposal to enable them to pay by eight yearly or 16 half-yearly instalments.
Taking those concessions together, I calculate—my right hon. Friend will tell me whether I am right—that the capital transfer tax will be charged to farmers at roughly the same rate at which estate duty would have been charged, namely, with effectively a 45 per cent. relief. Hon. Members will say that the situation is not, the same because many farmers never paid estate duty, but one thing which is slowly sinking in during our long debates—

Mr. Iain MacCormick: The hon. Gentleman is utterly out of touch

with agriculture in his constituency. Will he take it from me that farmers in the Highlands of Scotland—poor men, men probably earning less than he does—will be literally forced out of business by this tax? Does he imagine that that in any way helps his Socialist cause?

10.15 p.m.

Mr. Sedgemore: If anything, the Opposition's proposal would force a lot of owner farmers and working farmers out of business, as was obvious from comments by my hon. Friend the Member for Dudley, West (Dr. Phipps). My constituency contains one field and two cows. When they look healthy, I take it that the state of British agriculture is healthy.

Mr. Cormack: What a lot of "bull"!

Mr. Sedgemore: Since the amended capital transfer tax is roughly in line with the old estate duty, and since there have been special concessions to owner farmers, it must be regarded as fair.
One of the problems in considering new Clause 3—its effect would be to halve the value of the transfer upon which the tax will be levied—is that it would produce an unfair tax. A second problem of the clause is that it would cause economic distortions. In the year that I have been a Member of this House I have heard right hon. and hon. Members on the Opposition benches state repeatedly that it was central to their political philosophy that they did not want to cause economic distortions. In view of the question of fairness and the creation of distortion, we should reject their clause.
In view of the concessions already given to farming, if the value at which tax is to be charged were reduced to 50 per cent. this would obviously provide special help to farmers but not to small businesses, retailers or others who are concerned with the payment of the tax. That means—it is a point that the Treasury must consider when introducing a new tax—that it would be unfair as between one class of taxpayer and another. Immediately this concession was granted, the small business men, retailers and others who were liable to pay the tax would demand the same treatment.

Mr. Dafydd Wigley: The hon. Member says that distortions might be introduced if certain allowances were given to agriculture and not to other businesses. Are not agricultural land values so much out of parallel with other asset values that distortions already exist and steps must be taken to make up for this?

Mr. Sedgemore: If the hon. Member is saying that agricultural land values are too high I agree with him, but he must think of what would happen to agricultural land values if we accepted the Opposition's new clause. It would lead to further investment in agricultural land purely for investment purposes. Land values would inevitably be forced up, which would mean fewer owner farmers and fewer worker farmers. I am sure that the Opposition do not want that.
Therefore, because the Opposition's clause would be unfair and because it would introduce distortions, I shall vote against it if the Chief Secretary is prepared to accept it.
Some Conservative Members did not have the pleasure of listening to their comrades speaking in Committee on the capital transfer tax. Perhaps I could tell them of the words of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). He developed a new species of man called "Tewkesbury Man". He said that there were plenty of farmers in his constituency worth £500,000 a year. They got up at five o'clock in the morning to do the milking, seven days a week, 52 weeks a year. They had threadbare clothes and they did not go on holiday. He said that they were the people who would be hurt.
I do not think that it is the purpose of my right hon. Friend the Chief Secretary or of the Treasury to hurt small businesses, large businesses or farmers. I am sure that all my hon. Friends are concerned to see small businesses, large businesses and farms flourish. The only matter at issue, and the divide between us, is how that can be done. I believe that new Clause 3 would not help the future of farming.
I turn to the woodlands concession. My right hon. Friend the Chief Secretary rightly said that the TUC thinks he has gone a little too far, but I may just feel

able to support him. I do not have with me the figures that the TUC gave me, but I am sure I am right in saying that since 1970 the amount of private planting has increased and the amount of planting for the Forestry Commission has reduced. I accept that the import of timber is a serious matter and that it is reaching proportions almost equivalent to the import of oil. Therefore, the future of forestry is a serious subject which we must consider. I agree with the TUC that we must take steps to ensure that planting by the Forestry Commission increases radically. That may mean an alteration in the Treasury's public expenditure plans.

Mr. Watt: Does the hon. Gentleman seriously suggest that all the planting of trees must be done by the Forestry Commission? Does he not appreciate that it is vital that the private sector of forestry plants as many trees as it can?

Mr. Sedgemore: I did not say that, and I do not argue that all the planting should be done by the Forestry Commission. What I say is that if the effect of the tax is to diminish private planting, the Government should take systematic steps to ensure that that is more than made up for by the increases in Forestry Commission planting and use the Bill as an opportunity to see that that comes about.
Everyone knows that the TUC was right in saying that forestry had become a traditional area of tax avoidance. By investments in forestry one could avoid the payment of not only capital gains tax but in certain circumstances, if one was clever enough, income tax.
We on this side of the House are not against forestry, but we are against the sort of pressure campaign we have seen in the House over this issue. There has been whipped up a campaign allegedly concerned with forestry workers, but more concerned with the interests of landowners. I am sure that the Government have come to a reasonable compromise on the matter, and we should congratulate them on that.

Mr. Hugh Fraser: I am sure that the farmers in Luton and Dudley will rejoice, but I am sure also that the heaviest, most profound and most


disastrous tax over which the present Government are presiding is the tax of inflation at 20 per cent. a year. That is the root of our problem. It is only proper to look at the taxes proposed on agriculture and forestry in the light of that rate of inflation.
The hon. Member for Dudley, West (Dr. Phipps) is a farmer. I am sure he is a good employer. Let me give him some idea of the effect of a 20 per cent. rate of inflation. If the hon. Gentleman takes on a new dairyman to milk his cattle he will be paying him, given the present rate of inflation, £2 million a year by the time he retires. That is the rate of inflation over which the Government are presiding, and that is the situation that they are not lifting one finger to abate. The gravamen of the charge against the Government is that on top of this inflation they come forward with this kind of tax.
I think the whole House will agree—the hon. Member for Rother Valley (Mr. Hardy) and Dagenham (Mr. Parker) rightly made this point—that the taxation of farming and agriculture needs to be considered from the long-term point of view. Such taxes cannot be changed overnight as has been suggested. We must take a long look at agriculture and forestry. The hon. Members for Luton, West (Mr. Sedgemore) and for Dudley, West are closely in touch with the TUC on these great problems. Doubtless they will be reinforced by the arrival of Mr. Shelepin. He will be able to give us his views on State farming and on how to treat the peasant in the Ukraine. Perhaps a report will be passed to the subservient Government Front Bench by the hon. Members for Luton, West and Dudley, West on how these things are better done.
The hon. Member for Rother Valley rightly said that taxation is not merely a question of squeezing the rich, trying to get money from the rich or trying to redress a social grievance. Those may be some of the functions of taxation, but a fundamental function of taxation, as employed by an inteligent and percipient Government, should be to apply principles which ensure that our resources are spent in the most fruitful areas for the nation as a whole.
It is precisely for those reasons that I would attack the proposals that have

been put forward for farming and forestry. Taxes on farms, whether it be the proprietor or the tenant who is involved, will undoubtedly lead to the fragmentation of farming. Whether we are Marxists, Conservatives, supporters of the school of Balogh or supporters of the school of Keynes, such taxation can only do one thing—namely, to increase the cost of food.
As I have said, 40 years from now we shall be paying farmhands £2 million a year, given the present rate of inflation. Let us consider the price of the fragmentation of farming and the replacement of already over-expensive building. With respect, there is already far too much investment in building in agriculture. On that basis fragmentation will lead to an immense distortion of the cost of food production. The tenant farmer will be faced with heavy outgoings on his working capital.
I do not know whether the hon. Member for Dudley, West is a large or small farmer. Undoubtedly he is of Matto Grosso type and just right for dealing with the peasantry and all that sort of thing. Of course, Shelepin can tell us how to deal with the kulaks. But even today on a comparatively small farm the outgoings when a farmer gets out of the business or dies run into £60,000 to £80,000. That is the position on a comparatively small farm.
With this new heavy burden, agricultural production will be distorted. That is not good planning. The Government and their supporters are merely pursuing a policy which forms part of this mysterious social contract, on which one either is or is not welshing. I should refer the matter to the Victoria Club to decide who is welshing. If the two Ministers appeared before the bookmakers they would undoubtedly get a fair judgment.
10.30 p.m.
It is certain that the purpose of the tax is not to improve agriculture, not to make better use of resources, but to win votes in Luton, West and Dudley, West by attacking in a vindictive way the people who oppose the Government's policies.
A point about forestry which has perhaps been missed by the Government


Front Bench but has been seen by the hon. Member for Rother Valley and many of my hon. Friends is that the calculation should not be based on the actual value of a tree cut down in this country but on the value of the imports which are saved. Every £100 worth of timber grown in this country saves £400 worth of sawn timber from abroad. That is the key point which is always missed by Treasury officials.
The policy being pursued by the Government is not the conservation or improvement of national resources. On the contrary, it will lead to a reduction in the amount of timber we produce. The Government's proposal does not go far enough, and in all reason they should accept our proposal and that of the Scottish Nationalists.

Mr. Buchan: The trouble with the right hon. Member for Stafford and Stone (Mr. Fraser) is not so much that he objects to my hon. Friends wanting to take lessons in how to treat the peasants but that he and the Conservative Party are continually irritated by the fact that the British people are no longer content to be treated by the Conservatives as peasants.
The debate has been a mixture of stupidity and naivety. I had some sympathy with the hon. Member for Banff (Mr. Watt), who made this subject the major part of his previous campaign as a member of the Conservative Party. Tonight he expressed views similar to those of the Conservative Party, but he is extremely naive if he thinks that the main problem in relation to land is the capital transfer tax. It is not. The main problem is the inflated land values over the last few years which have resulted from land being bought for investment purposes and as a hedge against inflation. The story told by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) about farmers worth £500,000 working a seven-day week and wearing threadbare clothes is true, and it is true because the value of land has been distorted. The tax will not raise the value of land to that extent.
The proposals made by the Conservatives in new Clause 3 are supported, to my astonishment, by the Scottish National Members who at one time

claimed to be radical. I notice that when radical proposals are discussed there is always one Welsh Nationalist present and one Scottish Nationalist missing—the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid). I am astonished that the SNP, with its pretence at radicalism, should be supporting—

Mrs. Winifred Ewing: It is the hon. Gentleman's attendance that is disgraceful.

Mr. Buchan: It is the attendance that alarms me. I might have expected one hon. Member from the SNP but not the whole bench.

Mr. Douglas Crawford: Does that mean that the 37 Scottish Labour Members who are not in the Chamber disagree with the hon. Member for Renfrewshire, West (Mr. Buchan)?

Mr. Buchan: That is the point I was making. If the hon. Gentleman wants a historical record I will give it. We were discussing industrial development certificates last week. Not one Member from the Scottish National Party was present. We discussed regional policy. Not one Member from the SNP turned up. They all turned up on Wedensday to vote for the increased pay for the Queen. That was the party's record last week.
The support of the SNP for new Clause 3 is based on a mixture of naivety and stupidity—stupidity because it has not looked at the consequences and naivety because it has listened to the siren voices of the Conservative Party. The effect of the clause would be to distort land values. It would make agricultural land an investment, and when that happened we would be on the road to destroying agriculture in this country.

Mr. MacCormick: Does the hon. Member want the people of Scotland to have a system of collective agriculture such as was introduced in the USSR? That seems to be the natural end to what he is suggesting.

Mr. Buchan: I said that the SNP argument was based on naivety and stupidity. The naivety is illustrated by the hon. Member for Banff and the stupidity by the hon. Member for Argyll (Mr. MacCormick). This clause would have the effect of increasing the value


of farm land beyond any agricultural value. That would hurt the farmer and his family. If the hon. Member wants collectivisation, he will get it—collectivisation by the large institutions.
There was a story told of Robert Blatchford who was walking across a field with some scouts when the owner came up and said "Get off my land." "What do you mean by 'my land'?" asked Blatchford. "It is my land. I inherited it from my ancestors", said the landowner. "How did your ancestors get it?" "Oh", said the landowner, "they fought for it." "Right", said Blatchford, "I'll fight you for it."
The British people have a right to determine the use of land and a right to take action which prevents the drift of good agricultural land into the hands of institutions, using it as a hedge against inflation, which distorts its value and harms the working farmer, owner-occupier or tenant farmer. It is these people we are out to protect.

Mrs. Winifred Ewing: Does the hon. Member agree with my condemnation of his Government who, between 1967 and 1970, boasted that they did not allow the Forestry Commission to use its powers of compulsory purchase in respect of one acre of land?

Mr. Buchan: I shall deal with that when I get on to forestry matters. With respect to the hon. Lady, I was talking about farming. I was not condemning it. Indeed, I was responsible for the policy in Scotland at that time.
I thank my hon. Friend the Minister for ensuring that the change in values will help the lower taxpayer, whether in business or in agriculture, and also for the concession made to the widow. That is an extremely important point in agriculture. Opposition Members would know all this if they knew more of the people who live and work on the farms rather than listening to the views of the landowners.
The real problem in forestry has not been dealt with by Opposition Members. The problem is the lack of investment in forestry and the lack of planned planting. Therefore, the real solution is to increase the investment in forestry—[Interruption.] I will deal with whether it be public or private in a moment. The

second requirement is enhanced planning of large-scale forestry planting.
It is not enough to leave these matters to the private forestry developer. Historically, private activity has been one of the main methods used to evade tax. By carrying out private development, those people evaded estate duty, income tax and capital gains tax. [An HON. MEMBER: "Avoided."] I am corrected. I should have said "avoided". At any rate, they so framed the laws that they avoided tax by legal methods. Secondly, they did not let timber and forestry planting be seen as a national asset to add to the economy. It was planting carried out often uneconomically, often on good agricultural land, and often in an unplanned direction.
Let us look at the situation in South-West Scotland. I agree that we did not do enough in earlier administrations. I agree that I would like to have seen the use of compulsory purchase powers. I was working on the subject when the election came in June 1970. It took time to analyse the situation. The situation was that private forestry was buying good agricultural land for planting and the Forestry Commission was debarred from buying land for planting.
The answer to the problem is not simply to purchase land for forestry planting. The answer is to get planned use between forestry and agriculture. For this reason I asked the Highlands and Islands Development Board to take action in the Strath of Kildonan, the glen in which the clearance took place and in which I was born. For the first of these historical reasons—not for the second—I asked for a land use survey. But when I got it, I said that it was too timid. That land, the equivalent of stretching from here to Birmingham, was in the hands of seven landowners. These are problems which we must seek to deal with in taxation policies. This is why the story involving Robert Blatchford is so important.

Mr. Stephen Ross: The hon. Gentleman spoke of a part of Scotland I know well since I used to manage an estate above the Strath of Kildonan. Does he agree that those landowners, whatever their faults, spent large sums of money over a period of 20 years draining and restoring land for


planting, and that much money has gone into those areas from the pockets of landowners, whether they be from the South or from the North?

10.45 p.m.

Mr. Buchan: Some of the home farms were well managed. However, the planting was not sufficient, nor was there a sufficient carving out of mixed forestry and agricultural use. That is what was lacking. Furthermore, it gave a comparatively small amount of employment compared with employment on the support side of the industry. I therefore hope that new Clause 3 will be rejected.
I request the Minister to look closely at the points raised during this discussion on forestry. We require more money for forestry, and that money should be made available through the Forestry Commission. I am sorry for the many workers who came to protest, and who appealed to the naive side of the Scottish National Party, in regard to jobs in private forestry. However, the task is to initiate a properly planned programme of public investment in public planting and ancillary industries in the rural areas.

Mr. John Wells: I shall not refer to the long-winded and ill-informed speech of the hon. Member for Renfrewshire, West (Mr. Buchan) except to point out that the Forestry Commission probably has a worse land use policy than that of any other landlord in the country.
The problems of horticulture will be made much worse by this legislation. We are all aware of the difficulties which farmers will face if they are forced to fragment their holdings to pay this heavy impost. It will be even worse for the horticulturist whose holding is even more compact, since the capital value per acre of such a holding is very much greater.
The hon. Member for Banff (Mr. Watt) made a fundamental mistake in his assessment when he spoke about acreages, because in horticulture and intensive agricultural situations the values of glasshouses run to perhaps £40,000 or £45,000 per acre at today's prices. The glasshouse sector of the horticulture industry is suffering desperately. The hop growers are in grave difficulties because of European competition. Of all the hop growers

in the E.E.C., the British are the only ones not to expand their industry. The British fruit growers are experiencing great difficulties. Yet an extra burden is now put upon them.
Since it appears that Finance Bills come once a quarter, I hope that British industry will be remembered kindly when the next one comes along.

Mr. Wm. Ross: There has been a great deal of levity in this debate instead of the seriousness which I would have wished to see, considering the gravity of the situation we are discussing.
There was a great deal of talk in Committee about forestry and agriculture. We were promised relief of a certain type, which eventually arrived for forestry. However, that relief does not meet the points made in Committee and does not go far enough to meet the requirements of public and private forestry.
Forestry does not necessarily start with planting out the trees. It starts with the plans for producing the seedlings. I fear that grave damage has already been done to the private forestry industry. Many trees have not been planted this year because of the difficulties which people could see ahead. As a result, many of those trees will be lost. Producers will lose those young trees, and they will see no reason to produce more. The repercussions of the present difficulties will extend for several years ahead.
If this nation needs timber, we must encourage people to grow trees. The Bill positively discourages investment in timber, on the grounds that there are vast profits to be made. Whether that is so is a moot point. However, profit certainly does not come quickly. Profit will not be reaped for about 50 years. Therefore, as we do not know what will happen in the next 50 years, it seems the rankest foolishness to discourage planting at this time.
In this regard I should like to turn to a point that I have made previously not only in this Chamber but in Committee. If the land were not used for growing timber, it would be producing mutton, wool and beef. Therefore, we must consider the profit to be made from mutton, wool and beef compared with the profit from timber at the end of


50 years. That is what the private forester will consider. It is on that basis that he will decide whether to plant trees.
If forestry in this country declines, many of the 10,000 or 11,000 people employed in the industry will lose their jobs and move not so much to other industries as to other nations where their expertise and hard work will be used for the benefit of other peoples and will be lost for ever to Britain.
A suggestion was made by one right hon. Gentleman that planting was carried out on good agricultural land. The policy of the Northern Ireland Government was that good agricultural land should not be used for planting trees. The small private grower in Northern Ireland—there are only two or three private growers of medium size—will not plant trees on good agricultural land because he needs it for farming. Such people should be positively encouraged as the Minister of Agriculture, Fisheries and Food is encouraging them. If the Minister of Agriculture is encouraging and the Treasury is discouraging the planting of trees, may I suggest that they put their heads together and endeavour to come up with a reasonable and sensible policy which will demonstrate that the Government are heading in the same direction?
The hon. Member for Banff (Mr. Watt) said that farmers were overworked and underpaid. As a farmer I feel sure he was speaking the truth, because I have often felt underpaid and overworked. Of course I am overworked here, as are all hon. Members, but that is only to be expected.

Dr. Phipps: This is the second or third time that this point has been made by Opposition Members. If farming is such an unpleasant, poorly paid and fearsome life, are we not doing the farmer's children a favour by taking the burden of the farm off them?

Mr. Ross: If the hon. Gentleman considers farming to be a profitable business, why is he not in it?

Dr. Phipps: I am.

Mr. Ross: I am pleased to hear that. That is no doubt why the hon. Gentle-

man needs another source of income. As a farmer, he will be aware that there is a steady drift from farming into other industries. If farming is all that good, why are so many people leaving the industry? Why is there not a tremendous rush from other professions into farming? People are not going into farming. The drift is out of the industry.
The Government have not made their land policy clear. What do they want? Do they want the family farm to continue or to disappear? If this tax is allowed to run its course, two things can happen. I think that this point has often been made. The family farm will either fragment, become a totally uneconomic part-time farm and have a low level of productivity, or it will fall into the hands of the State. Precisely how the State will run it I am not clear. The State will have to put in civil servants to run that kind of farm, otherwise it will fall into the hands of a large corporation.
I believe that the system of owner-occupiers in Northern Ireland is the best system, all things being taken into account, and I think that this House, which was responsible for bringing about that situation in Ireland, should look at the situation at home and try to bring it about here if it wants to improve the position in the rest of the United Kingdom.
We have not had a clear definition of what "agricultural property" really is. It is in this respect that new Clause 3 draws attention to a principle which the Government have failed to take into account. Paragraph 7 of Schedule 8 defines "agricultural property" as
agricultural land or pasture and includes woodland … cottages, farm buildings
and so on. What it does not include, unfortunately, are crops and the animals which produce most of the profit and most of the living wage for the farmers. On that aspect of farming the full rate of tax will have to be paid, and it will have the most disastrous effects for those who wish to continue in family farming.
The hon. Member for Luton, West (Mr. Sedgemore) thinks that this is a fair tax. That is a matter of opinion. But if it is a fair tax, he is therefore saying that before the changes were made it was not


fair. If it was not fair then, why did he not seek to get changes made at that time rather than support them now?
Hon. Members have asked why special help is needed for farming. The special help that has always been given to farming is a reflection of the low return for the work and capital employed in trying to get a reasonable living from farming.
There are many things wrong with this tax in so far as it affects farming and the private forestry interests. I ask the Minister to go away, look at this again and for Heavens sake present something that is reasoned and presentable to the House.

Mr. Beith: I shall be brief because of the little time that is available. I do not want to reiterate the points that have been made so far, nor to go over the ground which we shall cover when Schedule 8 is debated and the amendments considered and I hope that the Treasury Bench will take a sensible and careful look at the amendments.
I do not think that the forestry and farming industries are looking to the Government for compassion or anything like that. They want a serious appraisal of the long-term prospects of their respective industries, and they do not feel that that has so far been done.
I wonder whether the Minister and his hon. Friends have looked at some sample farm accounts in order to see the impact of the tax upon them and taken a strict and practical view of what farms of specific sizes will have to pay under the tax proposed. Have the Government taken a close and practical look at the impact of the tax on individual farms, which is necessary in order to get some understanding of why these fears are so strong and widespread?
The farming community wants to feel that its prospects of contributing to future food production have been taken seriously by the Government. It is not interested in who is clobbering whom, or to what extent concessions have been made, or whether the Government have yielded sufficient concessions. They want to know whether the Government have done their sums right, and whether they have calculated that food will be grown and produced in the future. People in the

industry believe that the Government have either not made that calculation, or that they have got their sums wrong.
There are some things which bear out this fear. Reference has been made to working capital, which is one of the crucial problems facing any farmer at the present time. Another is the 20-years' purchase value, which is clearly out of line with what has happened to land values since somebody thought it out while sitting at a desk in some Government Department. There is a lack of appreciation in the Government's proposals of the differences in farm sizes in different parts of the country. It does not make sense to talk about a farm of 500 acres as if it were a standard size farm. That is not a standard size in an area where a large portion of the farm is hill or marginal land. There are areas in which 500 acres is a large farm, while in other areas it is quite a small farm and where the impact of the tax would be quite different.
11.0 p.m.
There are obviously ideological problems for hon. Members opposite, with some of which I can sympathise, about the fact that, on paper, farmers look rich men who are in a position to hand over to their descendants what look like large sums of money, but hon. Members must not be bemused by what they see on paper.
As long as it stays in agriculture, this is not money but assets to be used, to set against the liabilities and to keep farming going.
If the Labour Party are concerned to achieve changes, we would be with them in some things, but surely they do not want to bring about fragmentation, tenancies to be taken in and the enlargement of home farms, the consolidation of estates and the removal of tenants, with no farms being available to tenants.
If they want state ownership of land they surely do not want it to result from acquisitions, in lieu of tax, of parcels of land in different parts of the country, from those struggling to pay taxation. What kind of State land management could be based on pieces of land on estates throughout the country made over for the purpose of making tax payments, without regard to sensible management?
However some of the fears expressed about the Opposition's new Clause 3 are fears which I share, so I am not readily disposed to give support to new Clause 3 in the way it is phrased, giving wider relief than did the old estate duty. If there had been some other amendment which the Government would accept—we suggested £50,000 as a slice on which the Government could give exemption—it would have been different. They have made it difficult by not producing an amendment of their own, since we have fundamental fears about the effects of their proposals on agriculture.
One cannot serve two masters, and I would remind the Conservative Party that they cannot serve the farmer and the speculator at the same time. We must distinguish between the two, but the Government do not make it easy to draw a distinction if they give no indication of a willingness to accept proposals which would preserve farming production in this country. It would not be preserved as the Bill stands.

Mr. Joel Barnett: We have had an interesting debate on two subjects which go together—agriculture and woodlands.
I would say to my hon. Friend the Member for Dudley, West (Dr. Phipps) that I am obliged for his support and I hope he will not mind if I do not go quite so far as he would have me go. I hope to be able to convince hon. Members that we are concerned about the genuine full-time working farmers. I am sure he will understand.
I would say to the hon. Member for Banff (Mr. Watt)—he is not here—that there seemed to be a debate there which might have been better placed in the Scottish Grand Committee, but he told us how difficult it was going to be for the small working farmers in Scotland, particularly for those of whom he had experience. I do not know whether that is the experience of his hon. Friends. I see they nod, but the hon. Member said that none of those farmers earned enough to pay income tax or capital transfer tax, so I assume that they do not need to worry.—[Interruption.] That is exactly what he said. I should be happy if he looked at it in Hansard tomorrow.
I was glad to hear that the Liberal Party and the hon. Member for Berwick-upon-Tweed (Mr. Beith) noted that new

Clause 3 was not at all concerned with the small full-time working farmer. That was not the purpose behind that new clause, as was fairly recognised. What that new clause does is once again to seek to insert into the legislation even higher relief than applies under estate duty—50 per cent. relief on assets. That is what the Opposition seek to put up. It would be well beyond what was available under estate duty. The Opposition seek once again to have a most favoured asset.
As my hon. Friend the Member for Luton, West (Mr. Sedgemore) said, with his great knowledge of farming, that has done very great harm to the whole of our farming community—the real working farmers. The economic distortions have been immense. I am astonished that the right hon. Member for Cambridgeshire (Mr. Pym) should seek to put that kind of relief back on the statute book. If new Clause 3 went on the statute book—I do not know whether this was the right hon. Gentleman's intention, but this is what would happen—a man with no interest in farming could buy a farm and then give it to his son, and the son could sell it immediately thereafter and receive the cash having had 50 per cent. relief from the tax. That is the sort of thing which happened under estate duty.
But the right hon. Gentleman seeks to go even further, because not only does he want to have a relief in excess of the relief under estate duty; he wants it on top of the reliefs we have already in the Bill. That is the kind of situation that the right hon. Gentleman seeks to create. I think that not all of my hon. Friends would support that kind of situation, and I am glad that the Liberal Party will not support it—[Interruption.] I am sorry. The Liberal Party is very independent. But at least the hon. Member for Berwick-upon-Tweed could not support that kind of situation.

Mr. David Steel: My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) speaks for us all.

Mr. Barnett: I am interested to hear that the hon. Gentleman speaks only for himself and that there are divisions within the Liberal Party.

Mr. Steel: I said that my hon. Friend speaks for us all.

Mr. Barnett: I apologise to the hon. Gentleman. That is excellent. I am delighted to hear it, especially when such excellent things were being said.
In the Bill we have a number of reliefs. The right hon. Member for Orkney and Shetland (Mr. Grimond) referred to the multiplier, which at 20 times the rental value, as I explained in Standing Committee, would in most cases—I am not giving the favoured asset situation, because obviously we are talking about an average—give a similar situation to the 45 per cent. relief but without giving the avoidance opportunities of that kind of relief. Furthermore, it is better in a number of ways. First, it goes to those who are genuinely full-time working farmers, as defined in the Bill. Second, the relief is for the top rate, as opposed to the average rate under estate duty for the 45 per cent. relief. The multiplier is better in every way.
I have agreed—there is a later amendment on the Order Paper—that we are prepared to look constantly at the size of this multiplier to see that it is right. Depending on what happens to the values of land, we shall be able to reduce the value of the multiplier in order to reduce the value of the land by order. I hope that this will be acceptable to the House.

Mr. Esmond Bulmer: Will the right hon. Gentleman give way?

Mr. Barnett: I should be happy to give way, but I gather that the Opposition would like to debate the next new Clause. I see that the right hon. Member for Cambridgeshire would rather that I continued.—[Interruption.]

Mr. Bulmer: Will the right hon. Gentleman give the same undertaking about the rate of inflation?

Mr. Barnett: The right hon. Member for Cambridgeshire was quite right. I should not have given way.
The other relief that we gave is to reduce the lifetime rates, particularly for the small full-time working farmer. Rates below £250,000 will help small farmers, business men and traders. That is what that relief is there for. In addition to that, both the working farmer and the

agricultural landlord may benefit from the instalment arrangements to spread the tax over eight years by 16 half-yearly instalments.
All these reliefs are fairly substantial. I should have thought that they would be helpful to most full-time working farmers.
I turn now to the issue of agriculture. Again the hon. Member for Banff was very honest. He said that he did not care if there was tax avoidance as long as trees were planted. That is a very interesting argument. The implication of that argument, if this is the general view of the Scottish National Party—and, no doubt, they will qualify it at a later stage—is that the only reason we had a substantial amount of planting before was the avoidance which used to be available under estate duty. Much of the private planting was done under investment companies. That is precisely what happened. That is not what my hon. Friends the Members for Rother Valley (Mr. Hardy) and for Dagenham (Mr. Parker) would have wanted to happen. They would not want effects of that kind to reappear.
A number of hon. Members asked us to find more money by way of public expenditure to improve the amount of planting. I know that the right hon. Member for Cambridgeshire is constantly asking us to spend a great deal more money in all areas of agriculture. Perhaps he has not spoken to his other right hon. Friends on the Opposition Front Bench, not least his new Leader. She is not interested in increasing public expenditure. That is not, as I understand it, the Opposition's policy. I must assure the right hon. Gentleman that while I am concerned to see whether we can find more money to improve planting, through the Forestry Commission and through dedication grants, one has to have a tight control on public expenditure, and I cannot promise more at present, although I can assure my hon. Friends that if there are any really harmful effects I will look at the matter again. I can promise that. That is why we have put into the Bill the opportunity, for example, in agriculture, for altering the multiplier, and that is why I have given an assurance that we shall be looking at this matter constantly.
I was asked the reason for the provision in the new clause which gives relief for genuine woodlands; why the dedication scheme? The answer is quite simple. It is to stop the sort of devices that existed under estate duty whereby a man could buy woodlands on his death bed and save an enormous amount of estate duty. If hon. Members opposite do not know that that was going on, they are rather more naive than I think they are. It certainly has been going on under estate duty.
I think, and I am sure that my hon. Friends also think, that our proposals on woodlands go a long way to meet the case that was made to us on behalf of the genuine foresters, and I hope my hon. Friends will support the new clause. I hope at the same time that they will vote against new Clause 3 on agricultural relief, against going back to the bad old days, showing the country that what the right hon. Member for Cambridgeshire seeks to do is to represent, as his party does with business men, not the small traders, small shopkeepers and small farmers, but the very large ones and the large landowners as well.

Mr. Jerry Wiggin: We have a very short time in which to wind up this debate, and I am certain that the largest single industry in this country—agriculture—coupled with that of forestry, will note the timetable that has been forced upon us to deal with this tax which will have such a serious effect on both these industries, as indeed they will note the absence of the right hon. Gentlemen the Minister of Agriculture and the Secretary of State for Scotland from these debates.
I hope that under this tight timetable we may have a short period in which to debate the new schedule on forestry. Therefore, I will confine my remarks to one or two of the points which have been raised.
The Government consistently seem to fail to understand that forestry requires special taxation relief solely and only due to the length of time that the crop takes to grow. Inevitably some people in the past have taken advantage of the relief for taxation purposes. But both the CLA and the forestry interests have gone to the Treasury time and again and said that they would be perfectly happy to see

such tax avoidance loopholes closed. Therefore the argument that special tax treatment for forestry could be used as a tax avoidance dodge is particularly inappropriate.
11.15 p.m.
I am interested to hear that the TUC has been able to get its views across to the Government on forestry in general and on the Government's forestry amendment. That is a great deal more than the Forestry Commission of Great Britain has been able to do, and it represents all the forestry interests in the United Kingdom. It is deplorable that in spite of repeated requests to see the Inland Revenue it has been unable to put its representations since the statement by the Chief Secretary in Standing Committee.
The hon. Member for Dagenham (Mr. Parker) made a most constructive contribution to the debate and pointed out succinctly the country's enormous need for timber. Because of the extended timescale involved the disastrous effect of the introduction of the tax may take a long time to be felt. I am certain that in the end this country will be deeply sorry for what has been done here tonight. My hon. Friend the Member for Ludlow (Mr. More) covered comprehensively a number of the technical faults in the forestry amendment, and I hope that the Chief Secretary will answer those criticisms when we debate the schedule on Monday.
I turn now to agriculture and declare an interest not, unfortunately, as a land owner, but as a tenant farmer deeply to be affected by the tax. There are three important faults in the proposals. First is the rate of relief. At 20 times rental value it can be shown quite easily, particularly with rents going up and land values coming down, that the present relief referred to by the Chief Secretary is worth little or nothing to the industry. It is easy for him to say that he is to introduce an order to change matters, but we want to know why he has not introduced it already, or why he has not written a different rate into the Bill, which he could have done.
The right hon. Gentleman talks about the relief he has given on gifts inter vivos. This is rather like the situation of the condemned man who is to be hanged, drawn and quartered and is subsequently told that he is, after all, only to be


hanged. That would no doubt be a relief, but it is of small comfort. That is how the land owners and farmers will greet the Government's proposals.
The relief given under New Clause 8 applies to less than half our land. Let land is totally excluded and both the NFU and the CLA have made it clear that without the let land relief there will be a substantial change in the pattern of British farming. It will become increasingly hard for anyone to come in, and will remove one of the advantages this country has over its Continental neighbours—the landlord and tenant system. Obsessed as it is with the problems of the domestic tenant the Labour Party has totally failed to understand the great benefits which accrue to agriculture from our landlord and tenant system.
The tax will apply to breeding stock, to growing crops and to the machinery that is used in the industry. These were subject to relief under the old estate duty. Both the tenant farmers and the owner-occupiers will find it extremely hard to find the money to pay the tax and continue in business.
The Chief Secretary said that he believed that part of the virtue of this measure was that it would make it harder to avoid the tax and that one of the difficulties of the amendment was that it could be easily used to transfer large sums by the purchase and sale of agricultural land. We should be happy to see some such arrangement as is in the forestry amendment, to ensure that such a means of evasion could not be used, by providing that ownership of the land should last for, say, five or more years.
No Opposition hon. Member wishes to see these concessions used for tax avoidance, but we do not wish to see the total destruction of the present landowning structure. The hon. Member for Dudley, West (Dr. Phipps) put his finger on the matter when he made it clear that he and his hon. Friends wanted the total nationalisation of all agricultural land. Whether it comes within one generation or two, as a result of the tax, come it surely will.
I believe that some of the points made by Scottish National Party Members may

well lead to their voting with us. I can only advise the hon. Member for Banff (Mr. Watt) to be careful what company he keeps, particularly among the more hirsute Labour Members. I believe that it will be found that the genuine farmer in Scotland is as concerned as the genuine farmer in England and Wales to see the tax substantially ameliorated.
One or two reasonable points have been made from the Liberal bench. I hope that I can persuade Liberal Members into our Lobby. They continually wish to have things all ways. The speech of the hon. Member for Berwick-upon-Tweed (Mr. Beith) was much the same as it always is.
In Committee we put down an amendment, which was debated, dealing with a 60 per cent. application of the tax. To ensure a debate here, we have put down a different rate. I make no apology for that. What I hope the Liberal Party will support tonight is the principle. From the fact that the complex Schedule 8 gives a little relief, I believe that the Government's intentions are clear, and that they mean to give relief of about 40 per cent. for agricultural land, if the figures used were those that I am informed they were. If that is not the case, no doubt we shall find out what percentage relief they had in mind.
We are offering a simpler alternative, which can be understood in advance and easily applied as a rule of thumb. What farmer will be able to take advantage of giving away £1,000 a year? How will he know what acreage to give? He will not be able to measure in advance. It can only be valued afterwards. The relief that we propose is simple and straightforward. We are prepared to accept an extension of ownership to cover tax avoidance.
The Government are obsessed with avoidance. That obsession should be forgotten in the interests of seeing that we do not break up that which is important and valuable to us.
As crumbs from the table, new Clause 8 should be accepted by us. I hope that my hon. Friend will vote in favour of new Clause 3.

Question put and agreed to.

Clause read a Second time and added to the Bill.

New Clause 3

AGRICULTURE ASSETS

'Agricultural land, standing crops, production herds, and agricultural plant and machinery shall be excluded property to the extent of one half of the value thereof, and nothing in Schedule 8 of this Act shall operate to

diminish the partial exclusion hereby accorded—[Mr. Pym.]

Brought up, and read the First time.

Motion made, Question put, That the Clause be read a Second time:—

The House divided: Ayes 267. Noes 277.

Division No. 128.]
AYES
[11.25 p.m.


Adley, Robert
Fry, Peter
McCrindle, Robert


Aitken, Jonathan
Galbraith, Hon. T. G. D.
McCusker, H.


Alison, Michael
Gardiner, George (Reigate)
Macfarlane, Neil


Atkins, Rt Hon H. (Spelthorne)
Gardner, Edward (S Fylde)
MacGregor, John


Awdry, Daniel
Gilmour, Rt Hon Ian (Chesham)
Macmillan, Rt Hon M. (Farnham)


Bain, Mrs Margaret
Gilmour, Sir John (East Fife)
McNair-Wilson, M. (Newbury)


Banks, Robert
Glyn, Dr Alan
McNair-Wilson, P. (New Forest)


Beith, A. J.
Goodhart, Philip
Marshall, Michael (Arundel)


Bell, Ronald
Goodlad, Alastair
Marten, Neil


Bennett, Dr Reginald (Fareham)
Gorst, John
Mates, Michael


Berry, Hon Anthony
Gow, Ian (Eastbourne)
Mather, Carol


Biffen, John
Grant, Anthony (Harrow C)
Maudling, Rt Hon Reginald


Biggs-Davison, John
Gray, Hamish
Mawby, Ray


Blaker, Peter
Griffiths, Eldon
Maxwell-Hyslop, Robin


Bowden, A. (Brighton, Kemptown)
Grimond, Rt Hon J.
Mayhew, Patrick


Boyson, Dr. Rhodes (Brent)
Grylls, Michael
Meyer, Sir Anthony


Bradford, Rev Robert
Hall, Sir John
Miller, Hal (Bromsgrove)


Brittan, Leon
Hall-Davis, A. G. F.
Miscampbell, Norman


Brotherton, Michael
Hamilton, Michael (Salisbury)
Mitchell, David (Basingstoke)


Brown, Sir Edward (Bath)
Hampson, Dr Keith
Moate, Roger


Bryan, Sir Paul
Hannam, John
Molyneaux, James


Buchanan-Smith, Alick
Harrison, Col Sir Harwood (Eye)
Monro, Hector


Buck, Antony
Harvie Anderson, Rt Hon Miss
Montgomery, Fergus


Budgen, Nick
Hastings, Stephen
Moore, John (Croydon C)


Bulmer, Esmond
Havers, Sir Michael
More, Jasper (Ludlow)


Burden, F. A.
Hawkins, Paul
Morgan-Giles, Rear-Admiral


Carlisle, Mark
Hayhoe, Barney
Morrison, Charles (Devizes)


Carson, John
Henderson, Douglas
Morrison, Hon Peter (Chester)


Chalker, Mrs Lynda
Heseltine, Michael
Mudd, David


Churchill, W. S.
Higgins, Terence L.
Neave, Airey


Clark, Alan (Plymouth, Sutton)
Holland, Philip
Nelson, Anthony


Clark, William (Croydon S)
Hooson, Emlyn
Neubert, Michael


Clarke, Kenneth (Rushcliffe)
Hordern, Peter
Newton, Tony


Clegg, Walter
Howe, Rt Hn Sir Geoffrey
Normanton, Tom


Cockcroft, John
Howell, David (Guildford)
Nott, John


Cooke, Robert (Bristol W)
Howell, Ralph (North Norfolk)
Onslow, Cranley


Cope, John
Howells, Geraint (Cardigan)
Oppenheim, Mrs Sally


Cormack, Patrick
Hunt, Jonn
Osborn, John


Corrie, John
Hurd, Douglas
Page, John (Harrow West)


Costain, A. P.
Irving, Charles (Cheltenham)
Page, Rt Hon R. Graham (Crosby)


Craig, Rt Hon W. (Belfast E)
James, David
Paisley, Rev. Ian


Crawford, Douglas
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Pardoe, John


Crouch, David
Jessel, Toby
Parkinson, Cecil


Crowder, F. P.
Johnson Smith, G. (E. Grinstead)
Pattie, Geoffrey


Davies, Rt Hon J. (Knutsford)
Johnston, Russell (Inverness)
Penhaligon, David


Dodsworth, Geoffrey
Jones, Arthur (Daventry)
Percival, Ian


Douglas-Hamilton, Lord James
Jopling, Michael
Peyton, Rt Hon John


du Cann, Rt Hon Edward
Joseph, Rt Hon Sir Keith
pink, R. Bonner


Durant, Tony
Kaberry, Sir Donald
Powell, Rt Hon J. Enoch


Dykes, Hugh
Kellett-Bowman, Mrs Elaine
Pym, Rt Hon Francis


Eden, Rt Hon Sir John
Kilfedder, James
Raison, Timothy


Edwards, Nicholas (Pembroke)
Kimball, Marcus
Rawlinson, Rt Hon Sir Peter


Elliott, Sir William
King, Evelyn (South Dorset)
Rees, Peter (Dover &amp; Deal)


Emery, Peter
King, Tom (Bridgwater)
Rees-Davies, W. R.


Evans, Gwynfor (Carmarthen)
Kirk, Peter
Reid, George


Ewing, Mrs Winifred (Moray)
Kitson, Sir Timothy
Renton, Rt Hon Sir D. (Hunts)


Eyre, Reginald
Knight, Mrs Jill
Renton, Tim (Mid-Sussex)


Fairbairn, Nicholas
Lamont, Norman
Rhys Williams, Sir Brandon


Fairgrieve, Russell
Lane, David
Ridley, Hon Nicholas


Farr, John
Langford-Holt, Sir John
Ridsdale, Julian


Fell, Anthony
Latham, Michael (Melton)
Rifkind, Malcolm


Finsberg, Geoffrey
Lawrence, Ivan
Rippon, Rt Hon Geoffrey


Fisher, Sir Nigel
Lawson, Nigel
Roberts, Michael (Cardiff NW)


Fletcher, Alex (Edinburgh N)
Le Marchant, Spencer
Roberts, Wyn (Conway)


Fletcher-Cooke, Charles
Lester, Jim (Beeston)
Ross, Stephen (Isle of Wight)


Fookes, Miss Janet
Lewis, Kenneth (Rutland)
Ross, William (Londonderry)


Fowler, Norman (Sutton C'f'd)
Lloyd, Ian
Rossi, Hugh (Hornsey)


Fox, Marcus
Loveridge, John
Rost, Peter (SE Derbyshire)


Fraser, Rt Hon H. (Stafford &amp; St)
Luce, Richard
Royle, Sir Anthony


Freud, Clement
MacCormick, Iain
Sainsbury, Tim




St. John-Stevas, Norman
Steen, Anthony (Wavertree)
Wainwright, Richard (Colne V)


Scott, Nicholas
Stewart, Donald (Western Isles)
Wakeham, John


Scott-Hopkins, James
Stewart, Ian (Hitchin)
Walters, Dennis


Shaw, Giles (Pudsey)
Stokes, John
Warren, Kenneth


Shaw, Michael (Scarborough)
Stradling Thomas, J.
Watt, Hamish


Shepherd, Colin
Tapsell, Peter
Weatherill, Bernard


Shersby, Michael
Taylor, R. (Croydon NW)
Wells, John


Silvester, Fred
Taylor, Teddy (Cathcart)
Welsh, Andrew


Sims, Roger
Tebbit, Norman
Whitelaw, Rt Hon William


Sinclair, Sir George
Temple-Morris, Peter
Wiggin, Jerry


Skeet, T. H. H.
Thatcher, Rt Hon Margaret
Wigley, Dafydd


Smith, Dudley (Warwick)
Thomas, Dafydd (Merioneth)
Wilson, Gordon (Dundee E)


Speed, Keith
Thompson, George
Winterton, Nicholas


Spence, John
Thorpe, Rt Hon Jeremy (N Devon)
Wood, Rt Hon Richard


Spicer, Jim (W Dorset)
Townsend, Cyril D.
Young, Sir G. (Ealing, Acton)


Spicer, Michael (S Worcester)
Trotter, Neville
Younger, Hon George


Sproat, Iain
Tugendhat, Christopher



Stainton, Keith
van Straubenzee, W. R.
TELLERS FOR THE AYES:


Stanbrook, Ivor
Vaughan, Dr. Gerard
Mr. Adam Butler and


Stanley, John
Viggers, Peter
Mr. W. Benvon.


Steel, David (Roxburgh)






NOES


Abse, Leo
Dormand, J. D.
Janner, Greville


Allaun, Frank
Douglas-Mann, Bruce
Jay, Rt Hon Douglas


Anderson, Donald
Duffy, A. E. P.
Jeger, Mrs Lena


Archer, Peter
Dunn, James A.
Jenkins, Hugh (Putney)


Armstrong, Ernest
Dunnett, Jack
Jenkins, Rt Hon Roy (Stechford)


Ashton, Joe
Dunwoody, Mrs Gwyneth
John, Brynmor


Atkinson, Norman
Eadie, Alex
Johnson, James (Hull West)


Bagier, Gordon A. T.
Edelman, Maurice
Johnson, Walter (Derby S)


Barnett, Guy (Greenwich)
Edge, Geoff
Jones, Alec (Rhondda)


Barnett, Rt Hon Joel (Heywood)
Edwards, Robert (Wolv SE)
Jones, Barry (East Flint)


Bean, R. E.
Ellis, John (Brigg &amp; Scun)
Jones, Dan (Burnley)


Bates, Alf
Ellis, Tom (Wrexham)
Judd, Frank


Benn, Rt Hon Anthony Wedgwood
English, Michael
Kaufman, Gerald


Bennett, Andrew (Stockport N)
Evans, Ioan (Aberdare)
Kelley, Richard


Bidwell, Sydney
Evans, John (Newton)
Kerr, Russell


Blenkinsop, Arthur
Ewing, Harry (Stirling)
Kilroy-Silk, Robert


Boardman, H.
Fernyhough, Rt Hon E.
Kinnock, Neil


Booth, Albert
Fitt, Gerard (Belfast W)
Lambie, David


Boothroyd, Miss Betty
Flannery, Martin
Lamborn, Harry


Bottomley, Rt Hon Arthur
Fletcher Ted (Darlington)
Lamond, James


Bradley, Tom
Foot, Rt Hon Michael
Latham, Arthur (Paddington)


Bray, Dr Jeremy
Ford, Ben
Leadbitter, Ted


Brown, Hugh D. (Provan)
Forrester, John
Lee, John


Brown, Robert C. (Newcastle W)
Fowler, Gerald (The Wrekin)
Lever, Rt Hon Harold


Brown, Ronald (Hackney S)
Fraser, John (Lambeth, N'w'd)
Lewis, Ron (Carlisle)


Buchan, Norman
Freeson, Reginald
Lipton, Marcus


Butler, Mrs Joyce (Wood Green)
Garrett, John (Norwich S)
Litterick, Tom


Callaghan, Jim (Middleton &amp; P)
Garrett, W. E. (Wallsend)
Lomas, Kenneth


Campbell, Ian
Gilbert, Dr John
Loyden, Eddie


Canavan, Dennis
Ginsburg, David
Luard, Evan


Cant, R. B.
Golding, John
Lyon, Alexander (York)


Carmichael, Neil
Gould, Bryan
Lyons, Edward (Bradford W)


Carter, Ray
Gourlay, Harry
McCartney, Hugh


Carter-Jones, Lewis
Graham, Ted
MacFarquhar, Roderick


Castle, Rt Hon Barbara
Grant, John (Islington C)
McGuire, Michael (Ince)


Clemitson, Ivor
Grocott, Bruce
Mackenzie, Gregor


Cocks, Michael (Bristol S)
Hamilton, James (Bothwell)
Mackintosh, John P.


Cohen, Stanley
Hamilton, W. W. (Central Fife)
Maclennan, Robert


Coleman, Donald
Hamling, William
McMillan, Tom (Glasgow C)


Colquhoun, Mrs Maureen
Hardy, Peter
McNamara, Kevin


Concannon, J. D.
Harrison, Walter (Wakefield)
Madden, Max


Conlan, Bernard
Hart, Rt Hon Judith
Magee, Bryan


Cook, Robin F. (Edin C)
Hattersley, Rt Hon Roy
Mahon, Simon


Corbett, Robin
Hatton, Frank
Marks, Kenneth


Cox, Thomas (Tooting)
Hayman, Mrs Helene
Marquand, David


Craigen, J. M. (Maryhill)
Healey, Rt Hon Denis
Marshall, Dr Edmund (Goole)


Cronin, John
Heffer, Eric S.
Marshall, Jim (Leicester S)


Crosland, Rt Hon Anthony
Hooley, Frank
Mason, Rt Hon Roy


Cryer, Bob
Horam, John
Meacher, Michael


Cunningham, G. (Islington S)
Howell, Denis (B'ham, Sm H)
Mellish, Rt Hon Robert


Dalyell, Tam
Hoyle, Doug (Nelson)
Mikardo, Ian


Davidson, Arthur
Huckfield, Les
Millan, Bruce


Davies, Bryan (Enfield N)
Huckfield, Les
Miller, Dr M. S. (E Kilbride)


Davies, Denzil (Llanelli)
Hughes, Mark (Durham)
Miller, Mrs Millie (Ilford N)


Davies, Ifor (Gower)
Hughes, Robert (Aberdeen N)
Mitchell, R. C. (Soton, Itchen)


Davis, Clinton (Hackney C)
Hughes, Roy (Newport)
Molloy, William


Deakins, Eric
Hunter, Adam
Moonman, Eric


Dean, Joseph (Leeds West)
Irving, Rt Hon S. (Dartford)
Morris, Alfred (Wythenshawe)


de Freitas, Rt Hon Sir Geoffrey
Jackson, Colin (Brighouse)
Morris, Charles R. (Openshaw)


Dempsey, James
Jackson, Miss Margaret (Lincoln)
Mulley, Rt Hon Frederick


Doig, Peter

Murray, Rt Hon Ronald King







Newens, Stanley
Rooker, J. W.
Thorne, Stan (Preston South)


Noble, Mike
Roper, John
Tierney, Sydney


Oakes, Gordon
Rose, Paul B.
Tinn, James


Ogden, Eric
Ross, Rt Hon W. (Kilmarnock)
Tomlinson, John


O'Halloran, Michael
Rowlands, Ted
Torney, Tom


O'Malley, Rt Hon Brian
Ryman, John
Urwin, T. W.


Orbach, Maurice
Sandelson, Neville
Varley, Rt Hon Eric G.


Orme, Rt Hon Stanley
Sedgemore, Brian
Wainwright, Edwin (Dearne V)


Ovenden, John
Selby, Harry
Walden, Brian (B'ham, L'dyw'd)


Owen, Dr David
Shaw, Arnold (Ilford South)
Walker, Harold (Doncaster)


Padley, Walter
Sheldon, Robert (Ashton-u-Lyne)
Walker, Terry (Kingswood)


Palmer, Arthur
Shore, Rt Hon Peter
Ward, Michael


Park, George
Short, Rt Hon E. (Newcastle C)
Watkins, David


Parker, John
Short, Mrs Renée (Wolv NE)
Watkinson, John


Parry, Robert
Silkin, Rt Hon John (Deptford)
Weitzman, David


Pavitt, Laurie
Silkin, Rt Hon S. C. (Dulwich)
Wellbeloved, James


Peart, Rt Hon Fred
Sillars, James
White, Frank R. (Bury)


Pendry, Tom
Silverman, Julius
White, James (Pollok)


Perry, Ernest
Skinner, Dennis
Whitehead, Phillip


Phipps, Dr Colin
Small, William
Whitlock, William


Prentice, Rt Hon Reg
Smith, John (N Lanarkshire)
Willey, Rt Hon Frederick


Prescott, John
Snape, Peter
Williams, Alan (Swansea W)


Price, C. (Lewisham W)
Spearing, Nigel
Williams, W. T. (Warrington)


Price, William (Rugby)
Spriggs, Leslie
Wilson, Alexander (Hamilton)


Radice, Giles
Stallard, A. W.
Wilson, Rt Hon H. (Huyton)


Rees, Rt Hon Merlyn (Leeds S)
Stewart, Rt Hon M. (Fulham)
Wilson, William (Coventry SE)


Richardson, Miss Jo
Stott, Roger
Woodall, Alec


Roberts, Albert (Normanton)
Strang, Gavin
Wrigglesworth, Ian


Roberts, Gwilym (Cannock)
Strauss, Rt Hon G. R.
Young, David (Bolton E)


Robertson, John (Paisley)
Summerskill, Hon Dr Shirley



Roderick, Caerwyn
Taylor, Mrs Ann (Bolton W)
TELLERS FOR THE NOES:


Rodgers, George (Chorley)
Thomas, Mike (Newcastle E)
Mr. Joseph Harper and


Rodgers, William (Stockton)
Thomas, Ron (Bristol NW)
Mr. David Stoddart.

Question accordingly negatived.

New Clause 20

PROVISIONS AS TO TRANSFER OF PROPERTY

(1) Where property transferred consists of—

(a) shares, loans, stocks or debentures in a company registered in the United Kingdom none of whose shares are quoted on any stock exchange, or
(b) assets of a partnership carrying on business in the United Kingdom, or
(c) assets of a trade, vocation in profession wholly owned by the transferor and situate in the United Kingdom,

then, subject to paragraph (2) below, that transfer shall not be a chargeable transfer until the transferee sells the property transferred.

(2) Paragraph 1 above shall only apply where the property received by the transferee consists of at least one-tenth of the shares of the company, or one-tenth of the assets of the partnership, and where the transferor has owned the property transferred for a minimum of five years prior to the date of transfer.'—[Mr. David Howell.]

Brought up, and read the First time.

Mr. David Howell: I beg to move, That the Clause be read a Second time.
The purpose of the new clause is clear. It is to prevent the break-up of small businesses and family firms up and down the land. By the courtesy and generosity of the Government we have been left 22 minutes in which to discuss this issue and

the tens of thousands of jobs that are involved in it. It is disgraceful. There used to be a courtesy of this House that when the Government imposed a guillotine, Government back benchers, out of courtesy and understanding, would hold back in their verbosity. Like many other aspects of good manners, however, that is one thing which has been thrown over by the present Government, and it is no surprise to us.
Throughout the debate so far the Chief Secretary has maintained that the lower lifetime rates that were introduced on a piece of rather scruffy photo-copied paper in Committee upstairs as a so-called concession would help small business. First, if they help anybody—obviously, lower rates make the reprieve or stay of execution to some extent valid—they apply not only to small business but to everybody in the ranges concerned up to £250,000.
We say that this concession is no concession and that small firms will still be strangled. We are not the only people who say it. Not only the Opposition parties in this House say that. Throughout the country every Member has had the same experience. Letters have come, and hon. Members have been inundated with correspondence from firms all over the country who will be damaged and from jobs all over the country that will be lost.
Every time the Chief Secretary says that only a few people will be affected, I know he does not really believe that. He well knows that it will be many thousands of jobs, but he is obliged to say that particularly on the Floor of the House in front of his critical hon. Friends behind him who believe that this is the case and want to hear him say that. But it is not true. Thousands of jobs are affected. A motion was moved this afternoon under the Standing Order No. 9 procedure drawing the attention of the House to the loss of jobs in the textile industry. This is the way to lose jobs in the textile industry. This is the way to make sure that in a few years firm after firm in wool, textiles and knitting will close down, or be taken over by a large corporation with distant headquarters which will not have the slightest interest in the firm.
The same goes for printing, removals and the unquoted sector of shipping which will be damaged beyond repair and sold abroad. The same goes for light engineering and the building industry.
There are 6 million workpeople in the country who will be affected before long as the boss gets to retiring age and the time comes to consider what to do about the firm. With this tax, even at the lifetime rates, there will be only two choices. One is to sell up and the other is to sell out to a larger firm. That is the possibility, and it brings the shadow of redundancy into every firm of a size which will be affected by the capital transfer tax, and that is every size except the smallest.
Throughout the debate the Chancellor has gone to great lengths, with the Chief Secretary trotting behind him, through statistical variations, at which he is extremely good, to prove that the rates are very low—lower than estate duty. He even wrote an article in the Daily Express—which we looked at in Committee—in which he said that on a £50,000 garage the rate would be only £3,875. But he forgot a few things. He forgot capital gains tax which, as the table published in the Official Report showed, could put the tax up to £28,988. He conveniently forgot to mention that if the tax was paid in instalments by the donor, unless it came out of the £1,000 exempt transfer—which was so derided by the Chancellor

earlier today as being something which only Opposition Members knew about—it would not be £3,875 but £4,697. He forgot to mention that those figures applied only if there were no previous gifts. He forgot all the conditions and all the qualities that make the tax not lower but far higher than estate duty.
Government supporters may say that a firm worth £350,000 is enormous, but it is not a very big firm. They will know many working people in family firms of about that size. The tax that has to be paid to pass that firm on is £361,000—over 100 per cent. That is another way of saying that the firm must be brought to an end and those jobs must be brought to an end, and that is what will happen to tens of thousands of workpeople. If we cannot get that into the heads of Labour Members, we shall have failed to bring home to them that throughout the country they will damage thousands of small firms in the independent sector in all kinds of industry in many of the constituencies they represent.
Not the Chief Secretary, but many hon. Members behind him are against the independent sector. They want the National Enterprise Board to take it over. We are not. We are against big units, big corporations and big bureaucracy. That is why, throughout, we shall defend the independent sector and the small firms against the tax which is being imposed upon them and which will destroy them if it goes through.

11.45 p.m.

Dr. Gilbert: It is, of course, permissible for the hon. Member for Guildford (Mr. Howell) at this time of night to engage in a little generous hyperbole. On this occasion he has exceeded himself. I do not doubt that his postbag has been full of letters from firms throughout the country worried about the effects of this tax. I am not at all surprised, bearing in mind the sort of remarks he and his hon. Friends have been making over the past few weeks. There has been such a campaign of misrepresentation about this tax that it is virtually unrecognisable.

Mr. David Mitchell: When the hon. Gentleman says that there has been a campaign of misrepresentation is he referring to the article in the Daily Express by the Chancellor?

Dr. Gilbert: I am not sure what the effect of that intervention was meant to be. The hon. Member for Guildford and his hon. Friends have conjured up images of Arab-laden Cadillacs cruising around the industrial areas of the country, looking for small firms to swallow up. I have not seen any in my part of the country and I have not heard of them from any of my hon. Friends.
We have heard that this tax will mean the destruction of small firms when the hon. Gentleman knows perfectly well that the rates of duty, even allowing for the withdrawal of the 45 per cent. relief, are lower than they were under estate duty. He has continuously tried to misrepresent the effect of grossing-up and has totally ignored the comparative rates for estate duty and capital transfer tax.

Sir John Hall: Does the hon. Gentleman agree that, from figures given in Hansard recently, the operation of the capital transfer tax will mean that when the family of a man who has built up a business over several years, becomes liable to tax that tax will be in excess of the total value of the business?

Dr. Gilbert: I am coming to the capital gains tax. Tory Members have continuously misrepresented this proposal. The hon. Member for Guildford does not seem to understand the Bill—I impute no malice. He misrepresents the effect of grossing-up. He talks of a rate of over 100 per cent. When he talks of a grossed-up rate he knows that that is equivalent to 50 per cent. of a net transfer. He knows that a net rate of 50 per cent. comes in at a higher level under capital transfer tax than it ever did under estate duty. The rates are considerably lower and he knows it. If he does not know it he has not read the Bill or he is not familiar with estate duty provisions.
Conservative Members have told us that under the tax régime of this country it is impossible for a business to generate savings and for people to build up fortunes in their lifetime. If that is so, and I do not believe it, we are talking about the transmission of fortunes that have been inherited and not accumulated through savings or earnings. I take it from the silence of Tory Members that they take that point. I will be happy to give way if any hon. Gentleman wishes to intervene.

Mr. Hordern: The hon. Gentleman has forgotten to take into account the effect of capital gains tax. Will he give an undertaking that capital gains tax will not apply to death at any stage in our considerations?

Dr. Gilbert: Of course I will not give any such undertaking. One of the complaints hon. Gentlemen have been making is that the tax will lock entrepreneurs into a situation where they will not want to hand on their businesses during their life. They say that it is a disincentive to lifetime transfers. That is a serious criticism. Probably the most enormous disincentive to lifetime transfers is that capital gains tax is at present not chargeable on death. They will be glad to know that we propose to remove that disincentive to lifetime transfers by reimposing the capital gains tax charge on death, as we have indicated all along we would do.
We do not suggest that the capital gains tax in its present condition is a perfect tax. I have made no secret of my view on the tax, nor have my right hon. Friends in the Treasury. But the capital gains tax has been in situ for many years and the Conservatives have done nothing whatever to remedy the defects which they now claim to see in it. It is a most preposterous suggestion.
I will do the House the justice of examining new Clause 20—which was more than was done by the hon. Member for Guildford in moving the provision. The clause, which ostensibly seeks to relieve transfers involving small businesses, exempts from tax transfers of certain classes of asset until such time as the transferee sells the assets. The assets in question are shares in an unquoted company, assets of United Kingdom partnerships, and assets of a United Kingdom trade or profession wholly owned by the transferor. There is no condition in the clause to suggest that the amounts involved should be restricted in any way. Massive amounts of capital could be involved in the transfers for which relief is contemplated in new Clause 20. Some large companies are unquoted. Furthermore, the assets of some partnerships are large.
Representations were made to us about relief which my right hon. Friend introduced for stock appreciation in the Bill.


He was asked about stock in a partnership amounting to £1¼ million. It was put to him that this was a deserving case for relief and he was asked why we could not make relief available this year. My right hon. Friend said that he was unable to give relief this year. A huge amount of assets in a partnership could be let through the loophole provided by the clause.
The purpose of the clause is to place owners of certain types of assets in a privileged position—a situation which we believe to be intolerable. It would also cause serious economic distortions and lead the transferee to feel locked into assets which he had acquired, when it might be in his and in the nation's interest to sell them.
My right hon. Friend the Chief Secretary has made clear the reliefs which we have made available to small businesses. The lifetime scale provides for a substantial reduction at the lowest level in the effective rate of tax and a reduction of about one-third at a level of £250,000. These rates are lower than the rates on death which are themselves lower than the rates for estate duty.
We are told that we are not sufficiently considering the needs of small business. That is a preposterous charge and I invite my right hon. Friends to reject it with the contempt which it deserves.

Sir Geoffrey Howe: The speech made by the Financial Secretary was a disgrace to the merits of the argument. It is impossible to discover how the Government expect any small business to survive the imposition of a tax on this scale.
We are not concerned only with the private possessions of those who run these businesses—those who own them; we are concerned with the fact that these businesses provide jobs and occupations for many people throughout the country. What is more, they represent the seed corn of the future or the growth points from which future companies are likely to develop. The prosperity of Britain depends on their continued capacity to exist. How in Heaven's name can such companies possibly survive the rates of tax which the Government propose to introduce? The Financial Secretary has

never provided an answer to that question.
I take the example of a business worth £100,000 which has been running for a generation but which is not now growing in real value. It is now only keeping pace with inflation at a rate of 10 per cent. in money terms. We were told in a Written Answer that a business worth £100,000 would pay a combined capital gains tax and capital transfer tax of £105,000, which is more than 100 per cent. That is not taxation. It is not confiscation. It is wanton destruction.
This provision is founded upon a total misconception, which dominates the minds of Government supporters, that proprietors of small businesses are sitting upon spare cash and resources which they can spend on sweets and their own comfort and which they are free to raise and to pay to the Exchequer when their businesses change hands. That is a total misconception. The reason is that the Government are determined to destroy small businesses without any justification.

Sir John Hall: The effect of the example quoted will be to make the legatees bankrupt.

Sir Geoffrey Howe: My hon. Friend is right. There is a fundamental misconception in the mind of the Government.
How will the legatees preserve the business and raise enough money to pay the tax? The Chief Secretary suggested that they could do so by dividing the business up between the husband and wife. On another occasion the Financial Secretary said that they could do so by giving away £1,000 slices, using salami tactics. I dare say, they could do that if they sought the advice of the right hon. Gentleman. However, as soon as they did so they would be denounced by the Chancellor of the Exchequer for tax avoidance and for seeking to find loopholes in this monstrously absurd tax.
If those people are driven to selling those businesses, or parts of them, there will be nobody able to buy them, apart perhaps from Lord Kearton, the Arabs, Sir Don Ryder or Lord Stansgate, which is the other name of the Secretary of State for Industry. This is a prescription for domination by the State and for the destruction of small businesses.
The Government deserve to be indicted on all counts, and I invite my hon. Friends to reject the Government's proposals as enthusiastically as possible.

Mr. A. G. F. Hall-Davis: This talk of businesses being sold when the proprietor reaches retirement is untrue. Those businesses will be closed in the immediate future as a result of this legislation.

Mr. Robert Taylor: I wish to put the point of view

of a small company. I am the part owner of a company which in February exported £104,000-worth of door handles. Government supporters may think it amusing but it will not be worth while for that firm to export door handles of that value in future.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 262, Noes 277.

Division No. 129.]
AYES
[12 midnight


Adley, Robert
Fletcher, Alex (Edinburgh N)
Lane, David


Aitken, Jonathan
Fletcher-Cooke, Charles
Langford-Holt, Sir John


Alison, Michael
Fookes, Miss Janet
Latham, Michael (Melton)


Atkins, Rt Hon H. (Spelthorne)
Fowler, Norman (Sutton C'f'd)
Lawrence, Ivan


Awdry, Daniel
Fox, Marcus
Lawson, Nigel


Bain, Mrs Margaret
Fraser, Rt Hon H. (Stafford &amp; St)
Le Marchant, Spencer


Banks, Robert
Freud, Clement
Lester, Jim (Beeston)


Beith, A. J.
Fry, Peter
Lewis, Kenneth (Rutland)


Bell, Ronald
Galbraith, Hon. T. G. D.
Lloyd, Ian


Bennett, Dr Reginald (Fareham)
Galpern, Sir Myer
Loveridge, John


Benyon, W.
Gardiner, George (Reigate)
Luce, Richard


Berry, Hon Anthony
Gilmour, Rt Hon Ian (Chesham)
MacCormick, Iain


Biffen, John
Gilmour, Sir John (East Fife)
McCrindle, Robert


Blaker, Peter
Glyn, Dr Alan
McCusker, H.


Bowden, A. (Brighton, Kemptown)
Goodhart, Philip
Macfarlane, Neil


Boyson, Dr. Rhodes (Brent)
Goodlad, Alastair
MacGregor, John


Bradford, Rev Robert
Gorst, John
Macmillan, Rt Hon M. (Farnham)


Brittan, Leon
Gow, Ian (Eastbourne)
McNair-Wilson, M. (Newbury)


Brotherton, Michael
Grant, Anthony (Harrow C)
McNair-Wilson, P. (New Forest)


Brown, Sir Edward (Bath)
Gray, Hamish
Marshall, Michael (Arundel)


Bryan, Sir Paul
Griffiths, Eldon
Marten, Neil


Buchanan-Smith, Alick
Grylls, Michael
Mates, Michael


Buck, Antony
Hall, Sir John
Mather, Carol


Budgen, Nick
Hall-Davis, A. G. F.
Maudling, Rt Hon Reginald


Bulmer, Esmond
Hamilton, Michael (Salisbury)
Mawby, Ray


Burden, F. A.
Hampson, Dr Keith
Maxwell-Hyslop, Robin


Carlisle, Mark
Hannam, John
Mayhew, Patrick


Carson, John
Harrison, Col Sir Harwood (Eye)
Meyer, Sir Anthony


Chalker, Mrs Lynda
Hastings, Stephen
Miller, Hal (Bromsgrove)


Churchill, W. S.
Havers, Sir Michael
Miscampbell, Norman


Clark, Alan (Plymouth, Sutton)
Hawkins, Paul
Mitchell, David (Basingstoke)


Clark, William (Croydon S)
Hayhoe, Barney
Moate, Roger


Clarke, Kenneth (Rushcliffe)
Henderson, Douglas
Molyneaux, James


Clegg, Walter
Heseltine, Michael
Monro, Hector


Cockcroft, John
Higgins, Terence L.
Montgomery, Fergus


Cooke, Robert (Bristol W)
Holland, Philip
Moore, John (Croydon C)


Cope, John
Hooson, Emlyn
More, Jasper (Ludlow)


Cormack, Patrick
Hordern, Peter
Morgan-Giles, Rear-Admiral


Corrie, John
Howe, Rt Hn Sir Geoffrey
Morrison, Charles (Devizes)


Costain, A. P.
Howell, David (Guildford)
Morrison, Hon Peter (Chester)


Craig, Rt Hon W. (Belfast E)
Howell, Ralph (North Norfolk)
Mudd, David


Crawford, Douglas
Howells, Geraint (Cardigan)
Neave, Airey


Crouch, David
Hunt, John
Nelson, Anthony


Crowder, F. P.
Hurd, Douglas
Neubert, Michael


Davies, Rt Hon J. (Knutsford)
Irving, Charles (Cheltenham)
Newton, Tony


Dodsworth, Geoffrey
James, David
Normanton, Tom


Douglas-Hamilton, Lord James
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Nott, John


du Cann, Rt Hon Edward
Jessel, Toby
Onslow, Cranley


Durant, Tony
Johnson Smith, G. (E. Grinstead)
Oppenheim, Mrs Sally


Dykes, Hugh
Johnston, Russell (Inverness)
Osborn, John


Eden, Rt Hon Sir John
Jones, Arthur (Daventry)
Page, John (Harrow West)


Edwards, Nicholas (Pembroke)
Jopling, Michael
Page, Rt Hon R. Graham (Crosby)


Elliott, Sir William
Joseph, Rt Hon Sir Keith
Paisley, Rev. Ian


Emery, Peter
Kaberry, Sir Donald
Pardoe, John


Evans, Gwynfor (Carmarthen)
Kellett-Bowman, Mrs Elaine
Parkinson, Cecil


Ewing, Mrs Winifred (Moray)
Kilfedder, James
Pattie, Geoffrey


Eyre, Reginald
Kimball, Marcus
Penhaligon, David


Fairbairn, Nicholas
King, Evelyn (South Dorset)
Percival, Ian


Fairgrieve, Russell
King, Tom (Bridgwater)
Peyton, Rt Hon John


Farr, John
Kirk, Peter
Pink, R. Bonner


Fell, Anthony
Kitson, Sir Timothy
Powell, Rt Hon J. Enoch


Finsberg, Geoffrey
Knight, Mrs Jill
Pym, Rt Hon Francis


Fisher, Sir Nigel
Lamont, Norman
Raison, Timothy




Rawlinson, Rt Hon Sir Peter
Sims, Roger
Trotter, Neville


Rees, Peter (Dover &amp; Deal)
Sinclair, Sir George
Tugendhat, Christopher


Rees-Davies, W. R.
Skeet, T. H. H.
van Straubenzee, W. R.


Reid, George
Smith, Dudley (Warwick)
Vaughan, Dr. Gerard


Renton, Rt Hon Sir D. (Hunts)
Speed, Keith
Viggers, Peter


Renton, Tim (Mid-Sussex)
Spence, John
Wainwright, Richard (Colne V)


Rhys Williams, Sir Brandon
Spicer, Jim (W Dorset)
Wakeham, John


Ridley, Hon Nicholas
Spicer, Michael (S Worcester)
Walters, Dennis


Ridsdale, Julian
Sproat, Iain
Warren, Kenneth


Rifkind, Malcolm
Stainton, Keith
Watt, Hamish


Rippon, Rt Hon Geoffrey
Stanbrook, Ivor
Weatherill, Bernard


Roberts, Michael (Cardiff NW)
Stanley, John
Wells, John


Roberts, Wyn (Conway)
Steel, David (Roxburgh)
Welsh, Andrew


Ross, Stephen (Isle of Wight)
Steen, Anthony (Wavertree)
Whitelaw, Rt Hon William


Ross, William (Londonderry)
Stewart, Ian (Hitchin)
Wiggin, Jerry


Rossi, Hugh (Hornsey)
Stokes, John
Wigley, Dafydd


Rost, Peter (SE Derbyshire)
Stradling Thomas, J.
Wilson, Gordon (Dundee E)


Royle, Sir Anthony
Tapsell, Peter
Winterton, Nicholas


Sainsbury, Tim
Taylor, Teddy (Cathcart)
Wood, Rt Hon Richard


St. John-Stevas, Norman
Tebbit, Norman
Young, Sir G. (Ealing, Acton)


Scott, Nicholas
Temple-Morris, Peter
Younger, Hon George


Scott-Hopkins, James
Thatcher, Rt Hon Margaret



Shaw, Giles (Pudsey)
Thomas, Dafydd (Merioneth)
TELLERS FOR THE AYES:


Shaw, Michael (Scarborough)
Thompson, George
Mr. Adam Butler and


Shepherd, Colin
Thorpe, Rt Hon Jeremy (N Devon)
Mr. Fred Silvester.


Shersby, Michael
Townsend, Cyril D.





NOES


Abse, Leo
Davis, Clinton (Hackney C)
Huckfield, Les


Allaun, Frank
Deakins, Eric
Hughes, Rt Hon C. (Anglesey)


Anderson, Donald
Dean, Joseph (Leeds West)
Hughes, Mark (Durham)


Archer, Peter
de Freitas, Rt Hon Sir Geoffrey
Hughes, Robert (Aberdeen N)


Armstrong, Ernest
Dempsey, James
Hughes, Roy (Newport)


Ashton, Joe
Doig, Peter
Hunter, Adam


Atkinson, Norman
Dormand, J. D.
Irving, Rt Hon S. (Dartford)


Bagier, Gordon A. T.
Douglas-Mann, Bruce
Jackson, Colin (Brighouse)


Barnett, Guy (Greenwich)
Duffy, A. E. P.
Jackson, Miss Margaret (Lincoln)


Barnett, Rt Hon Joel (Heywood)
Dunn, James A.
Janner, Greville


Bates, Alf
Dunnett, Jack
Jay, Rt Hon Douglas


Bean, R. E.
Dunwoody, Mrs Gwyneth
Jeger, Mrs Lena


Benn, Rt Hon Anthony Wedgwood
Eadie, Alex
Jenkins, Hugh (Putney)


Bennett, Andrew (Stockport N)
Edelman, Maurice
Jenkins, Rt Hon Roy (Stechford)


Bidwell, Sydney
Edge, Geoff
John, Brynmor


Blenkinsop, Arthur
Ellis, Tom (Wrexham)
Johnson, James (Hull West)


Boardman, H.
English, Michael
Johnson, Walter (Derby S)


Booth, Albert
Evans, Ioan (Aberdare)
Jones, Alec (Rhondda)


Boothroyd, Miss Betty
Evans, John (Newton)
Jones, Barry (East Flint)


Bottomley, Rt Hon Arthur
Ewing, Harry (Stirling)
Jones, Dan (Burnley)


Bradley, Tom
Fernyhough, Rt Hon E.
Judd, Frank


Bray, Dr Jeremy
Fitt, Gerard (Belfast W)
Kaufman, Gerald


Brown, Hugh D. (Provan)
Flannery, Martin
Kelley, Richard


Brown, Robert C. (Newcastle W)
Fletcher, Ted (Darlington)
Kerr, Russell


Brown, Ronald (Hackney S)
Foot, Rt Hon Michael
Kilroy-Silk, Robert


Buchan, Norman
Ford, Ben
Kinnock, Neil


Butler, Mrs Joyce (Wood Green)
Forrester, John
Lambie, David


Callaghan, Jim (Middleton &amp; P)
Fowler, Gerald (The Wrekin)
Lamborn, Harry


Campbell, Ian
Fraser, John (Lambeth, N'w'd)
Lamond, James


Canavan, Dennis
Freeson, Reginald
Latham, Arthur (Paddington)


Cant, R. B.
Garrett, John (Norwich S)
Leadbitter, Ted


Carmichael, Neil
Garrett, W. E. (Wallsend)
Lee, John


Carter, Ray
Gilbert, Dr John
Lever, Rt Hon Harold


Carter-Jones, Lewis
Ginsburg, David
Lewis, Ron (Carlisle)


Castle, Rt Hon Barbara
Golding, John
Lipton, Marcus


Clemitson, Ivor
Gould, Bryan
Lomas, Kenneth


Cocks, Michael (Bristol S)
Gourlay, Harry
Loyden, Eddie


Cohen, Stanley
Graham, Ted
Luard, Evan


Coleman, Donald
Grant, John (Islington C)
Lyon, Alexander (York)


Colquhoun, Mrs Maureen
Grocott, Bruce
Lyons, Edward (Bradford W)


Concannon, J. D.
Hamilton, James (Bothwell)
McCartney, Hugh


Conlan, Bernard
Hamilton W. W. (Central Fife)
MacFarquhar, Roderick


Cook, Robin F. (Edin C)
Hamling, William
McGuire, Michael (Ince)


Corbett, Robin
Hardy, Peter
Mackenzie, Gregor


Cox, Thomas (Tooting)
Harrison, Walter (Wakefield)
Mackintosh, John P.


Craigen, J. M. (Maryhill)
Hart, Rt Hon Judith
Maclennan, Robert


Cronin, John
Hattersley, Rt Hon Roy
McMillan, Tom (Glasgow C)


Crosland, Rt Hon Anthony
Hatton, Frank
McNamara, Kevin


Cryer, Bob
Hayman, Mrs Helene
Madden, Max


Cunningham, G. (Islington S)
Healey, Rt Hon Denis
Magee, Bryan


Dalyell, Tam
Heffer, Eric S.
Mahon, Simon


Davidson, Arthur
Hooley, Frank
Marks, Kenneth


Davies, Bryan (Enfield N)
Horam, John
Marquand, David


Davies, Denzil (Llanelli)
Howell, Denis (B'ham, Sm H)
Marshall, Dr Edmund (Goole)


Davies, Ifor (Gower)
Hoyle, Doug (Nelson)
Marshall, Jim (Leicester S)







Mason, Rt Hon Roy
Rees, Rt Hon Merlyn (Leeds S)
Taylor, Mrs Ann (Bolton W)


Meacher, Michael
Richardson, Miss Jo
Thomas, Jeffrey (Abertillery)


Mellish, Rt Hon Robert
Roberts, Albert (Normanton)
Thomas, Mike (Newcastle E)


Mikardo, Ian
Roberts, Gwilym (Cannock)
Thomas, Ron (Bristol NW)


Millan, Bruce
Robertson, John (Paisley)
Thorne, Stan (Preston South)


Miller, Dr M. S. (E Kilbride)
Roderick, Caerwyn
Tierney, Sydney


Miller, Mrs Millie (Ilford N)
Rodgers, George (Chorley)
Tinn, James


Mitchell, R. C. (Soton, Itchen)
Rodgers, William (Stockton)
Tomlinson, John


Molloy, William
Rooker, J. W.
Torney, Tom


Moonman, Eric
Roper, John
Urwin, T. W.


Morris, Alfred (Wythenshawe)
Rose, Paul B.
Varley, Rt Hon Eric G.


Morris, Charles R. (Openshaw)
Ross, Rt Hon W. (Kilmarnock)
Wainwright, Edwin (Dearne V)


Mulley, Rt Hon Frederick
Rowlands, Ted
Walden, Brian (B'ham, L'dyw'd)


Murray, Rt Hon Ronald King
Ryman, John
Walker, Harold (Doncaster)


Newens, Stanley
Sandelson, Neville
Walker, Terry (Kingswood)


Noble, Mike
Sedgemore, Brian
Ward, Michael


Oakes, Gordon
Selby, Harry
Watkins, David


Ogden, Eric
Shaw, Arnold (Ilford South)
Watkinson, John


O'Halloran, Michael
Sheldon, Robert (Ashton-u-Lyne)
Weitzman, David


O'Malley, Rt Hon Brian
Shore, Rt Hon Peter
Wellbeloved, James


Orbach, Maurice
Short, Rt Hon E. (Newcastle C)
White, Frank R. (Bury)


Orme, Rt Hon Stanley
Short, Mrs Renée (Wolv NE)
White, James (Pollok)


Ovenden, John
Silkin, Rt Hon John (Deptford)
Whitehead, Phillip


Owen, Dr David
Silkin, Rt Hon S. C. (Dulwich)
Whitlock, William


Padley, Walter
Sillars, James
Willey, Rt Hon Frederick


Palmer, Arthur
Silverman, Julius
Williams, Alan (Swansea W)


Park, George
Skinner, Dennis
Williams, W. T. (Warrington)


Parker, John
Small, William
Wilson, Alexander (Hamilton)


Parry, Robert
Smith, John (N Lanarkshire)
Wilson, Rt Hon H. (Huyton)


Pavitt, Laurie
Snape, Peter
Wilson, William (Coventry SE)


Peart, Rt Hon Fred
Spearing, Nigel
Wise, Mrs Audrey


Pendry, Tom
Spriggs, Leslie
Woodall, Alec


Perry, Ernest
Stallard, A. W.
Wrigglesworth, Ian


Phipps, Dr Colin
Stewart, Rt Hon M. (Fulham)
Young, David (Bolton E)


Prentice, Rt Hon Reg
Stoddart, David



Prescott, John
Stott, Roger
TELLERS FOR THE NOES:


Price, C. (Lewisham W)
Strang, Gavin
Mr. Joseph Harper and


Price, William (Rugby)
Strauss, Rt Hon G. R.
Mr. John Ellis.


Radice, Giles
Summerskill, Hon Dr Shirley

Question accordingly negatived.

It being after Twelve o'clock, further consideration of the Bill, as amended stood adjourned.

Bill, as amended, to be further considered this day.

NORTON VILLIERS TRIUMPH LTD. (FINANCE)

12.11 a.m.

The Secretary of State for Industry (Mr. Anthony Wedgwood Benn): I beg to move,
That this House authorises the Secretary of State to pay or undertake to pay by way of financial assistance under Section 8 of the Industry Act 1972 in respect of the business carried on by Norton Villiers Triumph Ltd. sums exceeding £5 million but not exceeding £12·872 million.
First I will deal, as a courtesy to the House, with some points raised on points of order over the last day or two by the hon. Member for Henley (Mr. Heseltine), in order to put them entirely out of mind.
The motion was tabled on 4th November and it was done because, at that time, agreements between Norton Villiers

Triumph and the co-operative were nearing completion, but there was anxiety among the workers at Small Heath which led to delay. That delay was cleared by discussions which I shall deal with in the main body of my speech, but as we moved into the New Year, NVT appeared to be nearing the limit which would be required to maintain its production for export.
The points of order raised by the hon. Member for Henley were, as usually is the case, wholly spurious in character, because NVT drew our attention to this matter over a period in a series of letters to me, and then, last week, when I saw them I drew the attention of my colleagues to the need for this motion to be debated urgently. My right hon. Friend the Leader of the House, as I made clear in the House two days ago, was anxious not to have the motion coming on at a time which was inconvenient to the House and I therefore spoke to him on Monday, as I have said to the House. The motion was put down for debate tonight. That is the basis on which it has been brought forward.
It is not uncommon, as the hon. Member for Henley will know, for a Minister with industrial responsibilities to have to


urge that a debate should take place at a time not of general convenience to the House.

Mr. Heseltine: Of course, we fully accept what the Secretary of State has to say, but as he phoned the Leader of the House on Monday morning why was it not possible for the House to hear about the business that afternoon?

Mr. Benn: I am describing to the House the events—[HON. MEMBERS: "Answer."]—I am describing the negotiations I had with NVT and my contact with my right hon. Friend about the need for the motion to be debated this week—[HON. MEMBERS: "Answer."]—That is the position. If hon. Members of the Opposition showed any interest in the industry we are discussing instead of trying to make political capital, the House might make further progress. There has not been a single intervention by the hon. Gentleman or any of his hon. Friends that has shown that they have any concern whatever either for the jobs of the people in the industry or, indeed, for the future of the industry.

Mr. Hugh Fraser: Will the right hon. Gentleman give way?

Mr. Benn: I shall give way once or twice.

Mr. Fraser: The only point my hon. Friend was raising is that the right hon. Gentleman showed no interest in the convenience of this House.

Mr. Benn: That is wholly untrue. The order was tabled in November. For the reasons I have given, which are part of the account that I shall be giving in support of the motion, it was necessary for the order to be debated this week. That is manifestly clear. The point I was making, to which I adhere, is that hon. Members of the Conservative Party, throughout the whole of this story, have been principally concerned with what they wrongly believe to be some political advantage accruing to themselves, and not with the industry that we are discussing.

Mr. Churchill: Will the right hon. Gentleman give way?

Mr. Benn: No, I shall not give way to the hon. Gentleman, because he has

proved by countless interventions that he is not concerned with the issues that the House is actually debating.
The motion before us tonight is to allow a guarantee for £8 million for NVT, needed to finance its export stock. NVT markets in the United States about two-thirds of its output. The United States market for motor bikes is seasonal and requires an adequate revolving fund. The borrowing level is dependent first upon the level of production and export, and runs at about half the annual rate for export. The banks need an ECGD guarantee or cover for this work, and owing to the uncertainties that there have been surrounding the industry the United States cover, or some of it, has been withdraw, and NVT needs now an extra export guarantee to the extent of the motion before us.
This is the first time that the Industry Act, which we inherited from the previous Conservative Government, has been used to provide a guarantee for exports. The motion is that under the 1972 Act we should provide the necessary guarantees. I might add that though there is a connection—to which I shall come shortly—between the NVT and Meriden position, this is a motion to permit export finance to be made available for NVT itself and not for Meriden as such.
Of course, I only have to remind the House that the support for NVT was made available not by the present Government but by the previous Conservative Government, when under the same section of the Industry Act they made available, and announced nearly two years ago, £4·872 million for the merger of Norton Villiers with part of BSA to produce NVT. One of the intentions behind that merger was to push up production and exportst, and it is these exports that I a mahking the House to support with this motion tonight. That should be made absolutely clear.
I do not know what hon. Members will do at the end of this debate, but I must make it absolutely clear that if the motion is defeated by the House, that defeat will have the following immediate consequences. Anyone inclined to vote against the motion must vote against it conscious of what he is doing.
First, it will mean a shrinkage, a major reduction of exports by NVT—set up by the Conservative Party when it was in power. That would be the first consequence of defeating the order.
Second, it would mean that there would be lay-offs in Birmingham and Wolverhampton in NVT, which would be capable of producing for export but would be denied the necessary export guarantee under the Industry Act. Thirdly, because this is connected with the Meriden arrangements, the availability of money under the Meriden arrangement, to which I shall refer, would not be available for NVT as part of the sale of the assets. In effect, a vote against this motion tonight would do grave damage to the British motor cycle industry

Mr. Tim Renton: The right hon. Gentleman has just used the words "United States cover has been withdrawn". Could he tell the House what that means and why this cover has been withdrawn?

Mr. Benn: I have dealt with that, but I will amplify it if the hon. Gentleman requires me to do so. Some of the cover that had been available for NVT in the United States—nothing like as much as is now being provided by this motion—was withdrawn owing to uncertainties not unconnected with the events of Meriden, to which I shall be referring. If the hon. Gentleman wants me to read the account by Mr. Poore of the handling of the Meriden matter by the previous Government, I shall be happy to do so. It is not my wish to go into that chapter because I am carrying forward logically support of NVT initiated by the party opposite when they made their initial arrangement.
Now I come to the linkage between NVT and Meriden. My right hon. Friend the Secretary of State for Trade answered a Question this afternoon about the export provisions for Meriden. This is not covered by this motion. It is being covered under separate arrangements which he announced. But in order to sign agreements, which we hope will be signed tomorrow, between Meriden and NVT, which will bring into production a greater productive capacity for British motor cycles and exports, it is also necessary that this guarantee to NVT made

available in this motion should be granted by the House.

Mr. John Stanley: Would the Secretary of State say why the Export Credits Guarantee Department has made available £6 million in the way of export credits to cover the output of the Meriden factory which is not producing, whereas export credit guarantee finance has been denied to NVT which is producing?

Mr. Benn: My right hon. Friend the Secretary of State for Trade dealt with ECGD cover for Meriden in his statement this afternoon. The party opposite made support available for NVT below the £5 million limit. Therefore, the House has never had an opportunity until tonight of debating the support for NVT. We thought it right that if £8 million was to be provided in export credit for NVT, it should be added to the £4·872 million that had been provided by the previous Government and that the House of Commons should have an opportunity of discussing the matter. By doing it in this way—the motion which I have tabled makes it absolutely clear—the £8 million is added to what was given by the previous Government, bringing the amount up to £12·872 million in total. We thought it right that the House should have the opportunity of not merely debating it on the Adjournment but of considering it and deciding it, if necessary—although I hope it will not be necessary—in the Division Lobby tonight.

Mr. Heseltine: The Secretary of State has misunderstood my hon. Friend's question. The question was this. Why is it necessary for the Government to provide £8 million worth of export credit for NVT whereas the finance for export credit for the co-operative at Meriden can be raised from normal commercial export credit sources?

Mr. Benn: But ECGD is a Government agency—[HON. MEMBERS: "Answer."] I have answered the question quite clearly—[HON. MEMBERS: "No."] Hon. Members must contain themselves. By carrying out this procedure under the Industry Act the House of Commons has had an opportunity of discussing not only the NVT export credit, but the support that was given by the Conservative Government to the


company. If there are any further anxieties or questions my hon. Friend the Minister of State will deal with them in winding up the debate. I have explained, therefore, why, as responsible Minister, I urged that the procedure should be carried out under Section 8(8) of the Industry Act.

Mr. Heseltine: Will the Secretary of State confirm that the ECGD office did not refuse to grant this cover which is now being permitted under the Industry Act?

Mr. Benn: The hon. Member must recognise that in reaching decisions of this kind responsible Ministers take decisions—[HON. MEMBERS: "Answer."]—and then have to defend them in the House of Commons. What the hon. Member has been trying to do throughout his year on the Opposition Front Bench—[HON. MEMBERS: "Answer."]—has been to shield behind official advice and pretend that Ministers can only produce the advice that their officials gave them—[HON. MEMBERS: "Answer."] As the Secretary of State I thought it right to bring this matter forward under the Industry Act and to defend my—[HON. MEMBERS: "Answer the question."]—action in the House of Commons.

Mr. Heseltine: rose—

Mr. Benn: I will not give way.

Mr. Heseltine: Give way once more.

Mr. Benn: Mr. Deputy Speaker—

Hon. Members: Give way.

Mr. Heseltine: rose—

Hon. Members: Chicken!

Mr. Benn: I will not give way. The hon. Member has had plenty of opportunities to put his questions. He will have the opportunity to speak.

Mr. Heseltine: Give me the opportunity now.

Mr. Benn: No.

Mr. Deputy Speaker (Mr. Oscar Murton): If the right hon. Gentleman does not wish to give way he cannot be pressed beyond a certain point.

Mr. Heseltine: Will the right hon. Gentleman be reasonable—

Mr. Benn: I have answered the question put to me—[HON. MEMBERS: "NO."]—about why I thought it right to bring forward the guarantee under the Industry Act and in that way permit the House to debate NVT's initial support and the export credit guarantee. Under Conservative legislation the House was never permitted to debate the NVT merger. It involved a sum of under £5 million which was announced to the House but was never discussed by the House, and therefore early problems arisings from Meriden, which are fully described in the booklet Mr. Poore has written, were never brought to Parliament.
I now come to the situation which was created by the Government's decision to support NVT. Since so much is made of this perhaps I might refer to what Mr. Poore said about the arrangements made with the Conservative administration. I cannot vouch for it because I have no access to the papers. On page 7 Mr. Poore says:
The proposed procedure for announcing the closure was explained to the Industrial Development Unit, who confirmed once more that the company should proceed with the plan as previously agreed and the Department would take care of any political repercussions should they arise.
That is to say that it now appears, but was never made clear at the time, that the Government told Mr. Poore that he could close Meriden and Ministers would take responsibility for the political repercussions. [HON. MEMBERS: "Shame."] On page 14 Mr. Poore continues:
The company was surprised to learn that the Minister was adamant that there should be no recourse to the law and that he, the Minister, would now see what he could do. It appeared later that he had been under considerable pressure from the Department of Employment not to allow the use of any force at Meriden and had been told that the pickets would be able to mass up to 5,000 supporters from the other factories in Coventry who would arrive on the site in coaches within the hour if there were any signs of the use of police!
If Mr. Poore's account is correct, first Ministers say "Leave the political repercussions to us" and then, when it discovers that the men at Meriden are serious and have support, the Department of Employment says "Don't do anything by recourse to the law", because of the degree of support.
The story continues at page 19:
the NVT directors were, not unnaturally, loth deliberately to go against the express wishes of a Minister of the Crown, although Mr. Poore tried, unsuccessfully, to impress on the Minister and his officials the danger of the course NVT was required to adopt.
Then we read on page 20 that
high level pressure from the DTI continued to insist that the company must resolve the matter exclusively by negotiation. The words, 'It will be the worse for you if you do' were used when the possibility of recourse to the courts was brought up.
I am not confirming what Mr. Poore has said. What I am saying is that he is telling the House, through the pamphlet, that it was the Government that encouraged the closure of Meriden, then said "Leave the political repercussions to us", and afterwards engaged in this secret pressure, which was never reported to Parliament. That was the situation when we inherited the matter last March.

Mr. Hal Miller: rose—

Mr. Benn: I am dealing with Ministers, and the hon. Gentleman has not yet reached that position. He will have to wait a minute.

Mr. Nick Budgen: rose—

Mr. Benn: I am dealing with the Opposition Front Bench.
The hon. Member for Henley was a Minister in the Department of Trade and Industry throughout the period. He had no comments to make then on this basis. He never disclosed to Parliament what pressure was being put on Mr. Poore by the DTI. He never told the House that the arrangement to close Meriden had in a sense been cleared by the Department. He never told the House that he and his colleagues in the Department of Trade and Industry had told Mr. Poore not to worry, because the Government would deal with the problem.

Mr. Heseltine: rose—

Mr. Benn: I will not give way. The hon. Gentleman had better take it.

Mr. Heseltine: rose—

Mr. Deputy Speaker (Sir Myer Galpern): Order. The hon. Member for Henley (Mr. Heseltine) knows full well

that if the Minister does not give way he must resume his seat.

Mr. Heseltine: On a point of order, Mr. Deputy Speaker. I believe that it is the convention of the House that when an excessive personal attack is launched on a Member he may be allowed at least, as an act of courtesy, to question the remarks being made about him.

Mr. Deputy Speaker: The hon. Gentleman will have an opportunity to take part in the debate. It is entirely a matter for the Member who has the Floor whether he gives way. My only appeal to hon. Members is to put a silencer on the exhaust.

Mr. Benn: The hon. Gentleman had better wait until I complete what I shall say about him. He will have a chance to follow me in the debate.
I am putting on record that on the basis of the information that Mr. Poore has made available to the House through his pamphlet it becomes clear if the pamphlet is correct—and I cannot vouch for it—first, that the Government supported NVT on the basis of the closure of Meriden; secondly, that they told Mr. Poore that they would deal with the political consequences of the closure of Meriden; and, thirdly, that when Mr. Poore sought to take action through the courts they told him not to do it. All that happened without any report to Parliament.

Mr. Nick Budgen: rose—

Mr. Benn: I now turn to the present position of—

Mr. Budgen: rose—

Mr. Deputy Speaker: Order. Let us get on. I ask the hon. Member for Wolverhampton, South-West (Mr. Budgen) to resume his seat.

Mr. Benn: We have a three-hour debate, and I am sure that other hon. Members want to speak. That being so, I shall leave behind the past and turn to the present.
The present position is that NVT and the co-operative have almost agreed—and I hope that tomorrow an agreement will be completed—the asset sale for the Meriden site and a product sale, plus a


marketing link. At a time when the world market for motor cycles is buoyant, that will increase Britain's capacity to produce motor cycles and to sell them abroad. It would be lunatic if the House were to prevent the expansion of that capacity at a time when there is a capacity to produce. The men are ready to produce and the market exists. The Meriden plan is a serious plan and the proposal for a co-operative is one that I strongly recommend to the House.
I now turn to another issue that has been raised by Conservative Members about the view of the Industrial Development Advisory Board. I have been candid throughout in describing the discussions on these matters, and it is the case that the board opposed the proposal for the Meriden co-operative. I said in the House in answer to questions, and I say again, that the board appointed by the previous Government with a job of work to do made a recommendation against the Meriden co-operative, and that the Government, having considered that recommendation, decided that the views of the board could not be decisive. On 29th July I announced in the House that we were ready to support Meriden with £4·95 million—namely, £750,000 in grants and the rest by way of a loan. The overwhelming majority of that sum—that is around £4 million for the co-operative—will go to NVT as a purchase for the factory.
The House will also know that the workers at Small Heath were anxious lest they might be victims of the scheme. I went to Birmingham on 8th November. My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) and my hon. Friend the Member for Birmingham, Small Heath (Mr. Howell), in their constituency capacities, were very much concerned. The Small Heath workers expressed their anxieties to me at that meeting arising out of the past history of the industry. It was only after the Confederation of Shipbuilding and Engineering Unions had come in and called together representatives of the Wolverhampton, Birmingham and Meriden sites that we were clear to go forward with the passage of this measure.
At one time this country had 60 per cent.—

Mr. Reginald Eyre: What the work people in Wolverhampton and Birmingham do not understand about this matter, and particularly in terms of the right hon. Gentleman's visit to the factory at Small Heath, is why the necessary measures of finance which have been discussed this evening were not brought forward much earlier, in view of the intense anxiety that developed about employment which has worsened over the months of delay.

Mr. Benn: I do not know what conclusion the hon. Gentleman will draw. I would tell him that I had discussions with the representatives of the workers at Small Heath on this matter as early as June of last year. It was I who gave a pledge that I would not go ahead with this proposal if there were objections from the Small Heath work force. I went to Small Heath personally to satisfy myself as to their views. There was no doubt of the anxieties forcefully expressed to me.
Following that, I took the opportunity to try to get to the bottom of their anxieties and I called in the unions and then met the stewards from the three plants. I hope that the hon. Member for Hall Green will believe me when I say that if I had not been serious in my concern for the anxieties of the Small Heath people, this Meriden co-operative might have come forward many months ago. I think that that is accepted and understood by the Small Heath workers.
Of course I have had representations from them about their anxieties for the future and about their desire for a three-plant solution under public ownership. I have not been able to do more than to say to them that of course any proposals that come forward will be considered. But I believe that the way in which we have handled these matters has shown a proper sensitivity for the legitimate anxieties of the workers in Birmingham. I cannot say more than that.
I was saying that at one time this industry employed 8,500 people and had 60 per cent. of the market in the United States for the superbike. It now employs 2,500 and has only 20 per cent. of the market for the superbike. Without putting blame on anybody, for I see no virtue in that, I believe it to be a great tragedy


that this country, which had such a fantastic reputation for motor cycle production and export, should have found itself, for a variety of reasons into which I will not go now, progressively driven out of that market by the Japanese and others. We intend to go back in with the Meriden production. That is our view. The Government are now engaged in further studies of the development of the market world-wide and the extent to which we can fill it.
However, I cannot finish without saying one word about the workers at Meriden who have now been on the picket lines since 14th September 1973, in my judgment victims of a foolish decision taken by the previous Government at the time they launched Norton Villiers Triumph. They have waited for many months and have worked out their scheme and come forward with a scheme that the Government can support.
I genuinely believe that the contribution made by these people to the industry in which they have lived and worked merits the close attention and admiration of the House of Commons. Whatever may be said by Opposition Members about the Government as a Government, I cannot believe that they will fail to recognise that the workers at Meriden have been attached to their industry and want to see it succeed.
If there is a vote tonight against this motion, it will be a vote against employment in an industry for which there is a market and against even the NVT merger that the Opposition promoted. It will be another fatal blow against the British motor cycle industry, which over the years has suffered from the Conservative Party and from the economic philosophy to which it adheres.

12.45 a.m.

Mr. Michael Heseltine: As one thinks of those workers on the picket lines at Meriden who have such faith in this project, one wonders whether the faith of the 150 who stayed is not to be compared with that of the 1,600 who took off and got jobs in the neighbouring factories.
It is perhaps indicative of the anxiety that we on this side of the House have about the whole conduct of the Secretary of State for Industry's approach to his responsibilities that he can come to the

House tonight and tell us that it is his purpose that we should have an opportunity to debate this whole issue of the motor cycle industry and, therefore, he has contrived, as I understand it, a motion which enables us to examine the export credit finance facilities for Norton Villiers Triumph. It is a curious contrast that he managed to contrive that the £4·95 million for the Meriden co-operative under Section 8 of the Industry Act was £50,000 below the limit at which he would have had to come to the House, and he managed to get away without opening up the matter as he has done on this occasion.
There was a fascinating insight into constitutional history when we heard that I was supposed to have come to the House as Minister for Aerospace and Shipping, and I was supposed to go to the national Press to leak to every meeting I happened to attend the things that my colleagues were doing in full, collective Government responsibility. I wonder how many other members of the present Government really believe that it is the duty of Ministers who hear what their colleagues are doing incidental to their own responsibilities to reveal that information to the Press and to Parliament despite the vows of secrecy that every Minister takes when he enters the Government.
The reality, of course, is that there is one Minister who believes that that is the responsibility of a Minister of the Crown. Do not take my word for that, Mr. Deputy Speaker. Take the quotation from the late Mr. Crossman's diaries in which he said that he used to have a high regard for the Secretary of State for Industry until he discovered, every time he was going to a meeting of the Cabinet or of a Cabinet Committee, that the whole of the case that the Secretary of State for Industry was going to plead had been leaked to the Press in advance. If Mr. Crossman's diaries want vindication tonight, they have had it from the Secretary of State for Industry.
The matter we were discussing at that time was the establishment of the IDAB, the board which was set up to advise in all humility the Secretary of State for Industry about his responsibilities in this matter. All that it had to do was to give advice: it expected to be consulted. We are told that the House has been fairly treated—"wholly candid" was the phrase


used by the Secretary of State for Industry.
I remember, when the House had adjourned for Christmas and the Parliamentary Press had more or less given up its duties for the Christmas Recess, hanging around the Lobbies and telephoning the Secretary of State's office asking for the Kirby Report to find out what the protest of the IDAB had been. Is that being wholly candid with the House?
In reality, the final act of either delusion or deception was the suggestion that the co-operative could have gone ahead earlier if the Secretary of State for Industry had not cared about the workers in NVT. If the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) had told us this I would have listened with care and attention. He knows, however, that the workers in the Small Heath and Wolverhampton works of NVT would have stopped any attempt to sell the Meriden bicycles through NVT unless their agreement had been achieved. It was not in the hands of the Secretary of State for Industry to go ahead with the co-operative until that agreement had been reached. It was because he fundamentally misjudged the resistance of the right hon. Gentleman's constituents that for 12 weary months this matter has dragged out without coming to the House of Commons.
Let me come to the speech which the Secretary of State for Industry contrived to put into my mouth before I made it. He tries to suggest that if we vote against the motion tonight—

Mr. Dennis Canavan: "If"?

Mr. Heseltine: I assure Labour Members that I shall not disappoint them. I simply want to lead logically along the lines to the point to which the Secretary of State for Industry tried to steer my speech.
Now, at ten minutes to one o'clock, on the last day on which the money has to be made available, we are told that we have no choice but to make it available. That is supposed to be the full process of parliamentary consultation and the full involvement of Parliament in the scrutiny of taxpayers' money—something which we cannot refuse. Is that the way in

which the Government believe that the full parliamentary processes that we used to hear so much about from the Secretary of State for Industry should be made effective on the Floor of the House?
I understand, of course, that if help is not available for NVT within the next two or three days, or the next week or so, there would be calamitous results for the employees in that company. I say at once on behalf of the Opposition that we shall give every parliamentary support to a sensible, practical use of the powers of the Industry Act 1972 to make such cash available to NVT to ensure that no man in that factory is made redundant and so that we may have the time to sort out the mess in which the Secretary of State for Industry has landed us.
The issue ceases to be one of redundancy. There is no question but that the responsibility for the present clamitous state of NVT lies with the Secretary of State for Industry. It must follow, just as it did with the Court Line travellers, that the Bill has to be paid by the Secretary of State. The motion does not simply provide export credit for NVT. It is an instrument by which NVT is subjected to the will of the Government to enter into contractual arrangements with the Meriden Co-operative.
The full cost of this exercise is being deliberately hidden from Parliament by the Secretary of State, both as to the amount involved and the extension of public ownership. The whole process of the past 12 months has brought NVT to a stage where the only practical solution for the company is a degree of public ownership.
The motion was first published on 5th November 1974. Why has it taken four months to come to the House? What possible justification is there for that delay in providing export credit finance? The explanation is that the Secretary of State would not provide that finance until he had persuaded NVT to enter into an agreement to sell the bikes to the co-operative. In other words, the Secretary of State pressurised NVT against its commercial judgment.
Why has the matter become so urgent tonight, after all the 'phone calls, after letters of warning and endless discussions


—why so late at night when the national Press is not here to report what is going on? [Interruption.] Hon. Members know as well as I do that the amount of space left in Fleet Street editions at this time of night is limited. The reality is that the agreement was held up until the Meriden agreement was signed. All the assurances given by the Secretary of State to the contrary are phoney.
If that is not the case it is worth asking whether the right hon. Gentleman wrote to his right hon. Friend the Minister of State for Foreign and Commonwealth Affairs saying that he wished to give a general assurance that nothing in the Government's readiness to support the co-operative had been intended to act to the detriment of the workers at Small Heath. Did he write that and, if he did, how does he square that with the four months' delay that has taken place in bringing about the one thing the workers in NVT wanted, which was the security that came from the export credit guarantee?
It was not simply the use of the export credit finance order that the Secretary of State used to put pressure on the management of NVT. There was the question of the grant from NRDC, applied for by the NVT board to develop a new engine for its motor bikes to strengthen the job prospects of the workers in Wolverhampton and Small Heath. As we have had the "Blue Book" quoted already I will quote from page 27. The House will probably be familiar with the words, when the Chairman of NVT describes the meeting he held with the Secretary of State. He says that the right hon. Gentleman:
confirmed that he had been deliberately withholding approval to the proposed NRDC contract in order, as he put it, 'to have something in his corner during the negotiations'. NVT was shocked by this apparent attempt at coercion by an action which was so contrary to the vital need of the industry to develop new products quickly to meet Japanese competition, which was supposed to be one of the Secretary of State's prime concerns.

Mr. Norman Tebbit: Is it true?

Mr. Heseltine: If the words—

Mr. Tebbit: Is it true?

Mr. John Tomlinson: The hon. Gentleman would not recognise the truth if he saw it.

Mr. Heseltine: If the words in the "Blue Book" are open to question as being the opinion of a partial adviser, may I ask the Secretary of State whether he wrote to his right hon. Friend the Minister of State a letter in which he said:
The arrangements for research assistance will stand and will continue when the Co-operative has been launched.
Did he then, in his own handwriting, go on to say:
Once NVT and Meriden reach agreement, Part III of grant quickly available.
Did he write that letter? [HON. MEMBERS: "Answer."] Did that lead the Chairman of NVT to write to the Minister of State a letter on 11th September in which he said:
The stewards"—
constituents of the Minister of State—
have received (I understand from you) an additional communication which indicated that the bar to the NRDC assistance to NVT, which has been described as blackmail, would continue until the Meriden transaction has been legally completed.
Yet against this background did the Secretary of State for Industry write a letter on 6th November to the convener of the shop stewards at the Small Heath Works? Did he say in that letter:
I can, however, give you the firmest assurance that there will be no discrimination by the Government in favour of the Co-operative"—
[Interruption.] It is fascinating to listen to Labour Members when the trade unions are treated with such cynical contempt. When the Secretary of State takes such a view, Labour Members only laugh. In reality, the solidarity of the Left wing of the Labour Party here tonight is more important than the jobs of the workers concerned. That is the first criticism of the motion.
The second criticism is that Parliament—[Interruption.]

Mr. Deputy Speaker (Sir Myer Galpern): Order. The House has until only 3 a.m. to discuss this matter. If hon. Members keep yelling at one another, they will become completely exhausted. A large number of hon. Members wish to take part in the debate. Surely we can conduct the debate in a civilised fashion.

Mr. Heseltine: The second criticism of the motion is that Parliament has been consistently misled since the Secretary of State for Industry started off with the process of creating a workers' co-operative. He clearly explained on 29th July that the co-operative would not be given more than £4·95 million. When he was questioned by my hon. Friend the Member for Tonbridge and Malling (Mr. Stanley) on 28th November, the right hon. Gentleman said that that figure still stood. In reality since that time Parliament has not had the opportunity to probe the matter at all in depth because of action by the Secretary of State. Help to the co-operative was kept below the line so that it could not be probed. But the £4·95 million, which is supposed to be the ceiling above which support was not to go, has been added to. A figure of £8 million is being provided by way of Government support in the way of export credits. In addition, there was the original £5 million given to the motor cycle industry under the previous Government. We are told that a further £6 million will be provided by export guarantee to the co-operative at Meriden. Again, in addition, a further £15 million will be necessary to attempt to make sense of the scheme which the Secretary of State for Industry is now considering.
Why tonight are we not being told about the full financial implications of the commitment? If the Secretary of State for Industry is seriously saying that Parliament is in full possession of the information without making a judgment, he must tell us about the document which is in his hands known as "Plan Y"—a plan which sets out in detail why it will require a sum of £15 million before this industry can be brought anywhere near viability in the next five years.
If Government supporters doubt that, I shall quote the letter written by the Secretary of State for Industry. In writing to the convener of the Small Heath Works, Mr. Checkley, on 6th November 1974, having been asked what the long-term future of the industry was, he said:
You will appreciate, however, that I am not today in a position to give you firm undertakings about possible investment on the basis of the long-term plan just presented by the management of NVT. … Moreover, I can further assure you that I shall make every

effort to see that new plans suggested by NVT are examined urgently.
That was four months ago.
How can the Secretary of State for Industry say that he is not in a position to tell us anything about the additional £15 million, which he knows is totally and irreconcilably associated with this provision? The House has not been told the facts, and it is not in a position to make a judgment.
The third area of concern is that the way in which NVT has been treated over the past 12 months has brought that company to a position where it is not able to raise export credit finance because it is now so financially weak that it is not able to attract the support of the normal export credit organisations. That is why they turned it down. That is why the motion is being introduced by the Secretary of State.
There is no point in trying to suggest that some sudden crisis has overtaken the company. The Secretary of State has been warned over the months, and by letter in the last fortnight, of the impending collapse of the company. The company will collapse because the Secretary of State has made it impossible for it to obtain its assets which are tied up in the Meriden operation and without which it is not able to meet the working capital requirements or the levels of production needed to make the factory viable.
We have three main criticisms of the motion. There is a deliberate attempt to squeeze NVT into accepting the co-operative. That has left NVT with no alternative since it is financially too weak to turn elsewhere. Parliament has been deliberately excluded from access to information upon which a realistic assessment could be made.
If the House wishes to understand our anxieties over the coming Industry Bill, hon. Members have only to listen to the words used by the Prime Minister on Merseyside to describe our fears, and then to compare the way in which those fears have materialised in practice in the hands of the Secretary of State for Industry. It was said that there would be an all-powerful Cabinet, the Treasury, and Sir Don Ryder. But where were all these instruments of control while these activities were going on? Why are no Treasury Ministers present to explain


where they were when this matter was being debated?
The Secretary of State for Industry deceived his colleagues as much as he deceived the House. Whilst their backs were turned he pushed this decision to the stage where there was no choice but to bring it to the House. Everybody knows that that is the reality. The right hon. Gentleman may be able to fool his colleagues but he cannot fool us.

1.09 a.m.

Mr. John Tomlinson: We have listened to yet another example of the mock hysteria to which the House has been subjected recently. The general understanding earlier was that the Opposition would not even divide on this issue. However, there has been so much pressure from the Opposition back benches that we are forced to ask who is leading whom on the matter.
The hon. Member for Henley (Mr. Heseltine) has disgraced his own standards of conduct by his performance tonight. The hon. Gentleman's criticisms of the standards of conduct of the people in my constituency, who for the last 18 months have been fighting in the best British traditions for the right to work, struck me as wholly unacceptable.
In the trivia of his argument the hon. Member for Henley asked why no Treasury Ministers were present. Perhaps one of the reasons is that those Ministers must spend their time tonight blocking up those tax evasion loopholes which are sought by his friends.
To go through this exercise of decrying working men who are fighting for the right to work in a viable industry which is vital to our export trade is an abuse of the standards to which we have become accustomed in this place.
On what does the hon. Member for Henley draw for evidence? The tittle-tattle of somebody's diary is one of the main parts of his argument, a vague innuendo about the candour of hon. Members, and complaints that he had to be in the House on a Friday to get information. The hon. Gentleman complains about having to work a five-day week when hundreds of my constituents have been fighting 24 hours a day, seven days a week, for 18 months for the right to work.
The hon. Gentleman has come before this House in an attitude of bawling arrogance and made a whole string of accusations and, to prove himself an intellectual and a man of letters, he has produced letters one after the other.
The real issue is whether we can afford to sustain a three-plant British motor cycle industry. The hon. Gentleman, who talked about my constituents, is but a moped compared with their Bonneville 750 in terms of ability to make a meaningful contribution to anything.

Mr. Leslie Huckfield: Mopeds are not allowed on motorways.

Mr. Tomlinson: Indeed. I agree with my hon. Friend who will no doubt expand on that in more detail later.
The Government have brought before the House a motion that everybody knew would be forthcoming. It is an exercise in nonsense to pretend that they are ill-informed and not in a position to make a judgment. The facts have been eloquently put before the House in detail by my right hon. Friend the Secretary of State for Industry. Unless this money is made available to NVT, we shall be participating in burying not only the employment prospects of a large number of people in the West Midlands, but a vital export earning industry.
Let us make sure that the consequences of tonight's decision are made known to everybody not only in this House, but in the country. I am sure that this House will not fail to pass the motion. It appeared at one stage that hon. Gentlemen opposite would not divide the House on this issue. Then, half way through the speech by the hon. Member for Henley, we understood there had been a reconversion and that they would go into the Lobby. We shall have to wait to see what they eventually decide to do. However, if we go through the Lobbies tonight, I have no doubt that the House will pass the motion because so much depends on it. It affects not only the employment of everybody within the NVT organisation, but possible lay-offs at Wolverhampton and the position at the Meriden co-operative.
We should be clear about the position of the Meriden co-operative. For the first time in our history we have a real example of a large number of people who


will be able to resolve the classic conflicts in industry which have been largely responsible for the developing pattern of poor industrial relations. By getting rid of the "them" and "us" argument which has bedevilled industrial relations in industry for a number of years, we are reaching a situation where workers are combining together to own and control their own industry and future.
This is something which has worked successfully in many parts of Europe. West Germany has developed industrial partnership and industrial co-operative schemes. Conservative Members quote West Germany when they criticise our industrial relations, but when it comes to adopting structures which are working in that country and which it would be useful to emulate they do not have the courage of their convictions to move forward and adopt them.
I hope that the House will reject the churlish criticism of the hon. Member for Henley and pass this motion so that tomorrow we shall be able to get the historic signatures to documents that will start the workers' co-operative at Meriden.
People know my feelings about my constituents, but I cannot sit down without saying that over the past 18 months not a handful, not a mere 150, but many of them—people who in the February General Election rejected a Conservative Minister because they were not impressed with his performance—have fought in a way which is a tribute to the best standards which the Government benches have come to expect from the best of the British working class. We are proud of them. We look forward to the motion being carried tonight so that they can get on with their job of producing motor cycles which will benefit everybody in this community.

1.16 a.m.

Mr. Hal Miller: I hope that when the Minister replies to the debate he will show a little more courtesy than his right hon. Friend did to a West Midlands Member who has taken an interest in the affairs of this company and who was responsible for ventilating them in the House in an Adjournment debate before Christmas. The Secretary of State must not try to

take credit for rehearsing matters which if he had bothered to read Hansard he would have found I had covered in my previous speech.
I hope that when the Minister replies to the debate he will give us some specific replies to questions instead of the evasions that we have had up to now and the evasive replies that were given to me previously.
On the occasion of my Adjournment debate, I said that we had reached Plan 8 of NVT, but we have heard this evening that it has been rechristened Plan Y. We wish to know why. We want to know why this assistance is being made available under Section 8 of the Industry Act. Why could it not be by normal ECGD cover? Is it merely because there is already £6 million ECGD cover earmarked for Meriden which has not even begun output. Why could not that line of credit be used for NVT now?
Why is there this urgency, when the situation has been known to Ministers since last autumn and was raised in the House on a number of occasions in Questions and in an Adjournment debate? Why has this spurious sense of urgency been introduced by the Secretary of State?
Reference has been made to the document to be signed tomorrow. Why should that be said, when NVT signed it on 31st January? May we have an answer to that question? May we be told why NVT was in need of export credit finance? Was it because its American banks withdrew their credit because of the involvement of the Meriden co-operative? Will the Minister give us a reply to that?
Why have we not been told the full cost of the three-factory industry? Those estimates were given in 1973. They may have been updated subsequently; perhaps they are even more than the figures we were told then, but can we be told what they now are, because at that time an additional £15 million of investment was needed at Small Heath to maintain the jobs of the workers there, in tooling and equipment?
That is not all. An additional amount is needed for export finance for the production from that £15 million. Additional finance will be needed for retooling at


Meriden, because we have been told that the Bonneville is good only for another two years; so can we be told why we have not been given the full figures of the transaction? Can we, further, know why the NRDC grant has been delayed?
Questions have been asked about this with no satisfactory answer, and reference has been made by my hon. Friend the hon. Member for Henley (Mr. Heseltine) to the suggestion that blackmail was being used by the Secretary of State: it was a word used by one of the shop stewards at Small Heath when he paid a visit there. Is it not the case that on his first visit to Small Heath, the Secretary of State left them in such a confused state of mind that they thought that £8 million would be invested in plant and equipment which they needed for their work and that was not merely export finance?
Can we have something more from the Minister on that? Can he explain why in his determination to proceed with this co-operative, he has forced the motor cycle industry of this country to lose two years' exports to the United States of America and two years of development work on the engine, which is likely to place the market in the hands of the Japanese. Will he, further, tell us why a reappraisal of the American market is now needed to show that there will be a future for exports from the three-factory industry, when it is already well-known that the American market is in downturn and that large stocks of Japanese machines are hanging over that market.
Finally, can the Minister, in replying to his hon. Friend the Member for Meriden (Mr. Tomlinson) tell why those 150 or so pickets could not have work for 18 months when there were so many unfilled vacancies for work in the Coventry area?

Mr. Tomlinson: If the hon. Member does not understand that, he will never understand anything.

Mr. Miller: The hon. Member for Merident (Mr. Tomlinson) said that the facts are clear, but they are far from clear. I hope that the Minister will give the answers which the House and the country have a right to expect.

1.23 a.m.

Mr. Leslie Huckfield: If the performance from the Opposition Front Bench was shabby and trivial, it was certainly as synthetic. Tonight we have been dealing with the whole future of what is still a substantial British industry. We have been dealing with the last British motor cycle built in this country.
We have been dealing with the disappearance, or possible disappearance, of skills, which this country has seen gradually receding, with a possible £20 million of exports, and all the hon. Member for Henley (Mr. Heseltine) could concern himself with was when a telephone call had been made and when a letter had been written.
This is a shabby and a synthetic performance and it does the Conservative Party no justice, or credit. I hope that those responsible for the Centre for Policy Studies can do better. The right hon. Lady the new-found Leader of the Opposition the right hon. Member for Finchley (Mrs. Thatcher) goes on television or radio tonight and says that the country needs new leadership, but we shall not get it from the hon. Member for Henley.

Mr. J. W. Rooker: It is even more shabby, because since last Thursday, hon. Members have known that tonight we would be debating this motion, because it has been pinned up in the "No" Lobby. The fact that my right hon. Friend forgot to read it is neither here nor there.

Mr. Huckfield: I leave those who have read the recent Bullock report on literacy to draw their own conclusions.

Mr. Tom King: Will the hon. Gentleman give way?

Mr. Huckfield: I should prefer to make my own points. I am sure that the hon. Gentleman, who intends to speak later in the debate, will have a far greater opportunity than I shall have.
I declare my interest in this matter, in that I was one of those who, along with Bill Lapworth, the divisional organiser of the Transport and General Workers' Union in the Coventry area, suggested to workers at Meriden, many of whom are my constituents, that they


should attempt to negotiate with Mr. Dennis Poore for the possible formation of a workers' co-operative. That took place in September 1973.
I have always had faith in the viability of this project. I still have faith in it. I still have faith in Triumph motor bikes and in my constituents and those of my hon. Friends and those of hon. Members of the Opposition. Even if Opposition Members do not believe it, at least our constituents believe that their crafts, skills and products have a future.
However, we are not talking merely about making motor cycles. We are talking about a highly important experiment. We are talking about whether men have a right to participate in the decision taking and the management of the companies in which they work. We are talking about a development, an articulation, of a tradition of shop-floor management which has existed in the Coventry area for a long time. We are talking about a very carefully developed strategy which has been evolved over the past 18 months for the management and working of this co-operative and for the marketing of the motor cycles. We are talking about a very carefully evolved plan.
Even if hon. Members cannot accept that this is a carefully evolved plan, why can they not accept that it would cost money in redundancy benefits and social security payments for all the men who would be made redundant if this proposal does not go through tonight than it would cost to keep this experiment in being? [Interruption.]
If the hon. Member for Bridgwater (Mr. King) has not been listening to what my right hon. Friend the Secretary of State has been saying, he ought to have been.
What is at stake is not merely the jobs of those at Meriden but also the jobs of those at Small Heath and Wolverhampton. I repeat that it would cost more in redundancy payments and social security benefits to cope with the catastrophe which would follow if the motion is not approved than it would cost to see this experiment, I hope, succeed.
We have not heard a word tonight about the run-down of this industry.

What has happened to all those famous British names such as Francis Barnett, AJS, Matchless, Royal Enfield and Indian? Why the disappearance of a once-famous British motor cycle industry over the past 20 years?
Are not the new Conservative Opposition at all concerned about this? Do they really want the names of BSA and Triumph to be added almost automatically to this catalogue of run-down, disaster and inefficient management? Do they really want to perpetuate the kind of position started by Sir Bernard and Lady Docker? Do they honestly want to continue down that road until we have no British motor cycle industry at all? Do they want to see the police riding around Westminster on Honda motorcycles, and the police and local authorities having to equip their staff men and workmen with Hondas and BMWs?
That is the kind of thing that we ought to be talking about. Instead of talking about the run-down of the whole industry, all that the hon Member for Henley talks about is when a particular telephone call was made and when a particular letter was written. It was a shabby, trivial and synthetic performance.
I want to pay tribute to my constituents, many of whom have given up everything just because they believe in this particular motor-bike and this particular project. Indeed, if the dedication of the constituents of my hon. Friends and myself to their product was matched or could be matched by the dedication of some of the managements represented by hon. Members of the Opposition—my word! We would not have the balance of payment difficulties, the lame ducks or our chronic record on increases in productivity.
The dedication, fortitude and courage of our constituents who have stood at the picket gate at Meriden is something to be admired not only on the Government side of the House but by the House as a whole and by the people of this country. It is a tribute, and it deserves to go down in history. We were told once upon a time that Mr. Dennis Poore was supposed to be the great white hope of the British motor cycle industry. We were told that he was the only man in this country who could possibly save it.
What has not been referred to tonight is that even after the original closure was announced, the constituents of my hon. Friends and of myself were willing to make any kind of financial sacrifice just to keep the Meriden factory going. They were prepared to agree to a plan of voluntary redundancy. They were willing to agree to a plan for short-time working. They were willing to agree to a plan for work sharing. They were willing to agree to a reduction in the rates they were paid for waiting time when there was nothing to do. Our constituents were willing to make all these sacrifices to keep the industry in being. What sacrifices have Mr. Dennis Poore or the Norton Villiers Triumph management, or hon. Members opposite, been prepared to make to keep the industry in being?
It is interesting to note that not only was the Industrial Development Advisory Board concerned about the strategy of the Meriden co-operative but it was also concerned about the original strategy that Mr. Dennis Poore had provided for the British motor cycle industry. A very interesting fact is that all the economic and financial correspondents of various newspapers who visited Meriden just after the closure expressed even more doubt about the strategy which Mr. Poore had evolved than about the strategy of the Meriden co-operative. It is interesing to note the remarks made by the Industrial Development Advisory Board about Mr. Poore's own plan to try to save the industry.
We have heard various innuendoes about my right hon. Friend's attempts to conceal the real facts of the situation from the House. It is interesting to note some of the comments which were made when an earlier application for money was made. I quote from Hansard of 19th March 1973 when the Minister was asked:
Will he bear in mind the fact that the £4·8 million falls tantalisingly short of the £5 million figure which would require to come before the House under the provisions of Section 8 (8) of the Industry Act? Will the right hon. Gentleman represent to the Leader of the House the anxiety in many quarters that we should have a full debate on this topic at the earliest opportunity?"—[Official Report, 19th March 1973; Vol. 853, c. 40.]

Mr. John Biffen: Hear, hear.

Mr. Huckfield: I am glad the hon. Gentleman cheers, because those were his remarks to the then Minister for Industrial Development, Mr. Christopher Chataway, when he made the original grant of the £4·8 million and he made absolutely sure that the sum was suffisiently under the £5 million limit so that it would not have to be debated in the House.
We were faced with a situation in which this money was given to Norton Villiers Triumph by the previous administration without any kind of guarantees from Mr. Poore. The only condition imposed on the grant of that money was that Mr. Poore was to remain the chairman. There was no consultation with the unions. There was no debate in this House. There was no participation by anybody else involved with the company. The Government were not prepared to put any kind of Government appointee on the board of NVT. Above all, it was all done under exactly the same legislation as that under which we are discussing the matter tonight. What humbug, what hypocrisy, when everything we have been discussing tonight is being done under the legislation and under safeguards which the Conservative Party introduced.
The other matter which hon. Members opposite have not been keen to mention is that the strings that were put on the grant or the loan to the Meriden workers and the strings which were put on this export credit guarantee are far tighter than the strings which were put on Mr. Poore. The previous Government did not put any strings on Mr. Poore. They said he could have £5 million to reorganise the British motor cycle industry. He could spend the money as he wished. They would take care of the consequences.
I can only compare the lack of strings imposed by the Conservative Government with the strict financial controls imposed by my right hon. Friend on the Meriden co-operative and the ECGD guarantee. I visited the United States at the end of 1973 and I returned, after talking to American dealers for one week, with orders for 5,000 motor cycles. I talked to a mere 20 out of more than 450 dealers on a coast-to-coast basis, and I returned with immediate declarations of financial guarantees for more than 2 million


dollars. I believe that that kind of market still exists for Triumph motor bikes in the United States.
At the time of closure in 1973 there were outstanding orders for the Meriden factory for more than 2,000 motor bikes for the rest of the world, excluding the United States. While I was in the United States I learnt of the fear of the American motor cycle dealers that they would be completely dominated by the Japanese. They wanted Norton Villiers Triumph to succeed because that would give them at least an element of freedom from Japanese monopoly. When one sees the police in Washington D.C. riding around on Honda motor bikes one can appreciate the domination that American dealers fear. That is why the American dealership network wants the return to the market of the Meriden-made Triumph twin cylinder motor bike.
We are concerned here with a very important experiment. We have a product and an industry which will succeed. The industry can make a very important contribution to the export performance of this country and to the balance of payments. If all the Conservatives can worry about tonight is phone calls, letters and the nitpicking that we had from the hon. Member for Henley, when the whole of this British industry is at stake, I hope that the people of this country, like the House of Commons, will draw their own conclusions.

1.38 a.m.

Mr. Richard Wainwright: The opening speeches from the two Front Benches did shamefully little to help the House in its proper task of trying to assert parliamentary control over this large and possibly very useful sum of money. I beg the Minister of State to answer some of the key questions which would at once be asked in any commercial undertaking if the money belong to that undertaking or if it sought the money from the financial institutions.
Of course, the wholly trivial and synthetic uproar about the debate having been allegedly sprung on the House is absolute nonsense. All my colleagues received in their weekly circular from my hon. Friend the Liberal Whip last Friday a clear indication in writing that

the debate would almost certainly be held tonight. I am puzzled by the approach of the Secretary of State, however, when in opening he repeatedly indicated that he had intervened in order to have this financial matter so framed that it would give the House an opportunity to have the debate.
Is he saying that he put the company and its workers at risk by framing the matter in this way and that he chose to run the risk of defeat in the House, of which he spoke, in order to provide us with the debate? There is still a mystery in my untutored mind about why he makes this claim and whether he is implying, as it seemed, that there were other ways in which this export credit could have been obtained, but that he intervened to frame it in this fashion. It is still bewildering to me. I hope that the Minister of State will, if it is possible, clear the matter up before the end of the debate.
The question asked by people like me, hon. Members who do not pretend to have experience of this important industry, with its magnificent traditions, is: can we have a proper commercial statement of the prospects for a three-factory motor cycle industry? Can we have a marketing assessment of whether there is a prospect of sustained demand in the United States and of recapturing against extremely powerful competition, with extremely advanced designs and products, almost the extent of the market which we had nearly 10 years ago?
We must report to our constituents on a matter of this sort, because they are now very cynical about the way in which Government estimates of financial requirements are always proved to be grossly under-stated. Therefore, we must have a frank asssessment of the total expenditure likely to be required to give a three-factory industry a chance of being viable. That is the information that the ordinary layman in the House requires. The debate will have been fruitless if we do not get it.

1.42 a.m.

Mr. Ian Gow: I begin by examining the Secretary of State's suggestion that in these matters he has treated the House with the utmost candour. In the early hours of Tuesday mornings, when the Leader of the House


first told us that we would have the debate this morning, that right hon. Gentleman said:
It is because the Chairman of Norton Villiers Triumph has informed us today that this money must be forthcoming this week, otherwise there will be redundancies. This is the first that the Government have heard of the urgency of the matter."—[Official Report, 3rd March 1975; Vol. 887, c. 1227.]
That afternoon he said:
I have now found that my right hon. Friend the Secretary of State for Industry met Mr. Poore, the Chairman of Norton Villiers Triumph Ltd., on Thursday of last week. My right hon. Friend telephoned me yesterday from Bristol, and said that this matter must be dealt with this week, otherwise there would be great difficulties in the firm. I pointed out to him the great inconvenience to the House in debating the matter this week. However, he insisted that the matter must be dealt with this week, otherwise there was a danger of redundancies. Therefore, I announced the matter last night."—[Official Report, 4th March 1975; Vol. 887, c. 1275–1276.]
If the Secretary of State had his discussion with the Chairman of Norton Villiers Triumph last Thursday, why was it not until Monday that he had his conversation with the Leader of the House? We know that many members of the Cabinet are not on speaking terms with one another, but one would have thought that it would be possible to deal with the matter earlier if it was of such urgency, between last Thursday and Monday.
Secondly, I wish to quote with approval the following passage from page 36 of the "Blue Book":
if there is to be a system wherein public money is to be used, … then the administration and control which follows this investment must be divorced from any subsequent political pressure from the Ministry concerned with that industry.
It is precisely because from the present Secretary of State there will inevitably be great political pressure that my hon. Friends and I will vote against the motion. I must also say that I am uneasy at the extent to which the example which the Government are setting is likely to be followed by other industries. It is a great mistake to think that there is some bottomless purse which the Government can use to bail out ailing British industry.
I quote again from the historical summary of Norton Villiers Triumph Ltd. in page 36. The second paragraph reads:
An attitude is gaining ground, fostered by many unions, that a man or woman has not

only a right to work but a right to work in the same job in the same place doing the same thing, for a reward increasing year by year.
The House should be extremely wary of Government hand-outs of this kind. They shield the British people, and notably the employees of the industries concerned, from the harsh truths of economic reality. Once precedents of this kind have been set there will be mounting pressure on the Government to hand out more and more money to industries which become less and less profitable. I am bound to say that my unease at the passage of the 1972 Act has not been in any way alleviated by the conduct of the Secretary of State.

1.46 a.m.

Mr. J. W. Rooker: I shall keep my remarks short. I intend to make a few quotations from the so-called "Blue Book". I take up the quotation from page 36 which the hon. Member for Eastbourne (Mr. Gow) did not finish. After Mr. Poore says that people expect to work in the same place and in the same job making the same products year in and year out, he continues:
No change is allowable unless by agreement.
He is criticising the fact that he has to get the agreement of the workers before making changes. I go back to page 2 where Mr. Poore deals with the start of the whole fiasco. He refers to the plan that was constructed some eight or nine months before the BSA share quotation was suspended on 15th March. The paragraph reads:
The plan called for 60,000 superbike category motor-cycles in year 1, comprising 35,000 from full Meriden production, mainly Bonnevilles, 10,000 Tridents from Small Heath and 15,000 Commandos from Wolverhampton. In year 2, Meriden would close…
That closure was planned during the initial discussions which Mr. Poore had with the Department of Trade and Industry some eight months before the whole matter became public. How can there be agreement with the workers that Mr. Poore was criticising and moaning about in page 36 when an agreement had already been made in secret discussions to close Meriden?
A farcical and bogus argument has been put forward tonight. As I have already said by way of intervention, any


Member could have seen since last Thursday that in the early hours of this Thursday morning we would be likely to be talking about NVT. It is not right to suggest otherwise.

Mr. Leslie Huckfield: Economic illiteracy.

Mr. Rooker: My hon. Friend has the description. Another part of the "Blue Book" is worth looking at regarding the concern that was voiced by Norton Villiers prior to the public disclosures The second paragraph in page 3 reads:
Concern was expressed by Norton Villiers that the investment by government in a plan involving the closure of a factory might give rise to adverse public comment and might not be seen in its intended light… The Department was, however, able to confirm that there were no political objections to this course since the factory was in an area where labour was scarce and surplus labour generated by the closure could be readily absorbed.
That shows how little is known about the problems of the West Midlands.
This is a long, sad history. It is wrapped up with the BSA motor cycle factory and goes back to the days of Sir Bernard and Lady Docker. It is a history that does not say much for British management and its techniques. The history passes through the days of Mr. Eric Turner. When he left or was dismissed, however people care to put it, he was given so much money in the form of a golden handshake that he admitted in the Press later that he could not afford to take a job for 12 months. We do not know how much he got, but it was so much that he could not afford to work for 12 months. Yet we all know what has been happening at Meriden for the past 18 months.
The last illustrious figure to pass through BSA was Lord Shawcross, and then the whole thing crashed into fiasco and 3,000 workers lost their jobs in Small Heath, and all this was long before the problems that we are discussing tonight arose.
It will be interesting to see how the Birmingham and Wolverhampton Members on the Opposition side vote tonight. The crux of the matter is that tonight we shall be voting not about Meriden but about NVT, which is in Birmingham, Wolverhampton and Meriden.

1.51 a.m.

Mr. John Stanley: I hope that in his winding-up speech the Minister of State will be much more candid than was the Secretary of State in explaining the reasons for bringing this order under Section 8 of the Industry Act 1972. The Secretary of State gave no explanation for it. He tried to suggest that the reason was that he wished the House to have a debate on the Meriden Norton Villiers Triumph situation, but he must not be that disingenous with the Opposition, for it is clearly open to the Government at any time to debate that subject.
Equally, we have not so far been told why NVT has not been able to get export credit from ECGD, especially when such arrangements have been made for the Meriden co-operative. I hope that the Minister of State will appreciate that we are as aware as I hope he is that export credit has been applied for from ECGD by Norton Villiers Triumph for many months and that ECGD has consistently refused to make that credit available. It is the view of the company—and we shall be interested in what the Minister has to say about this—that export credit has been deliberately blocked because that was the one weapon that Ministers had to ensure that those who were working in NVT and those at Small Heath in particular were forced into a position in which they had to accept the three-factory arrangement for the industry, whereas if credit had been forthcoming that would have eliminated the one sanction Ministers had to make certain that their policy went through. I hope that the Minister will comment on that, because it is fairly clear that it is one reason why tonight we are discussing this order under Section 8 of the Industry Act.

Mr. Anthony Nelson: Does not my hon. Friend agree that it should not be just a matter of our hoping that the Minister explains why this finance was not arranged under alternative provisions? Does he not have a legal requirement to do so when for assistance to be provided under Section 8(8) of the Industry Act 1972 it is necessary to show under Section 8(1)(c) that financial assistance cannot appropriately be provided otherwise than by the Secretary of State?

Mr. Stanley: I am grateful to my hon. Friend for that intervention. He has made an extremely important comment on the legality of the motion, and no doubt the Minister will have carefully noted what my hon. Friend has said.
I should like to know how much public expenditure is involved in going down the three-factory route. It is common ground that there would have been no need for the motion and for this public expenditure had not Meriden been backed by the Government. I disagree with the hon. Member for Birmingham, Perry Barr (Mr. Rooker): I believe that this motion is essentially about the decision to back Meriden, not about NVT. There is no doubt that if the Meriden sit-in had not taken place and had not some £7 million of assets of NVT been effectively sequestrated by the co-operative, production at Small Heath and at Wolverhampton would not have been seriously undermined and NVT would not have experienced its present financial difficulties.
Indeed, if NVT had been able to continue on the two-factory basis as originally envisaged, there is no doubt in the minds of the management—and of the workers of the company—that no further call on public funds would have been required over and above the £4·872 million provided under the last Government. Therefore, it is clear to us that the only reason why additional public expenditure is required is the present Government's decision to support the Meriden co-operative.
What is the cost of the decision to support the Meriden co-operative, and what sort of return is it yielding in terms of jobs? The cost to public funds of the decision to back the Meriden co-operative represents the additional cost to public funds of supporting NVT plus the cost to public funds of supporting Meriden itself. Briefly, I suggest that on the best evidence we have those sums are as follows.
The cost to public funds of providing additional support to NVT arising directly from the decision to back the Meriden co-operative is the £8 million that we have before us this evening, in addition there had been the £4·95 million which has been made available already to Meriden in principle by the present Government and also the further £15

million which, in the company's assessment, will have to be injected fairly shortly if there is to be any possibility of getting a return—not immediately, but in 1979—out of three-factory operation. [Interruption.] I am referring, if the hon. Member for Nuneaton (Mr. Huckfield) will kindly listen, simply to the additional cost to public funds arising out of the decision to go for a three-factory solution and support the Meriden co-operative.
Aggregating those figures, it is clear that the total additional cost to public funds as a result of the decision to support the Meriden co-operative is approximately £30 million.
How many additional jobs will be provided in the constituencies of Labour Members who have spoken? Despite the fact that only 150 people of the original work force are still available for deployment in the factory, I understand that the co-operative is working on the basis of approximately 880 employees at Meriden.

Mr. Leslie Huckfield: At least.

Mr. Stanley: Let us round that up to 1,000 employees at Meriden. Given the fact that £30 million of expenditure will be required, that amounts to a cost to public funds of backing the three-factory solution of £30,000 per job. I suggest to the Secretary of State that on that basis he could happily have paid £5,000 or £10,000 to each of those people, whether gratis or in retraining, and still have made a substantial saving to public funds. That is the financial equation concerning jobs, and it is jobs which is the sole justification for proceeding with the motion.
Therefore, in voting against the motion tonight we are doing so simply because we can see from the figures that the Secretary of State is behaving in a totally irresponsible way financially and is putting ideology ahead of any sort of practical financial responsibility.

Several hon. Members: rose—

Mr. Deputy Speaker (Sir Myer Galpern): Mr. Biffen.

Mr. Heseltine: On a point of order, Mr. Deputy Speaker. May I seek your guidance on the point raised by my hon.


Friend the Member for Chichester (Mr. Nelson)? In introducing the debate tonight the Secretary of State said that he had decided to use this method of providing support to afford us an opportunity to debate the Meriden co-operative venture on the one hand and the NVT situation on the other hand. Section 8(3) of the Industry Act 1972 reads as follows:
Financial assistance shall not be given under this section in the way described in subsection (3)(a) of the last preceding section unless the Secretary of State is satisfied that it cannot, or cannot appropriately, be so given in any other way,".
If the Secretary of State has not tested whether it can be given in any other way, albeit for the motive he claims of giving us the opportunity of debate, the question arises whether what he is doing is within the law. If it is not, what price tomorrow the jobs he claims will be saved by this action?

Mr. Deputy Speaker (Sir Myer Galpern): I can only assume that the Secretary of State has given consideration to the matters raised by the hon. Member and has come to the conclusion that he cannot do it in any other way. The Secretary of State accepts responsibility. He knows what is the position under the Act on which he is taking this course of action, and he must have come to the decision that this is the only way in which he can do it.

Rear-Admiral Morgan-Giles: Further to that point of order, Mr. Deputy Speaker. Is it reasonable for the Chair to assume that? Would it not be right for the Secretary of State to confirm that point himself rather than that the Chair should assume it?

Mr. Deputy Speaker: I do not think that there is any need for him to do so. I have sufficient faith in the Secretary of State to believe that he has made that decision. If the Secretary of State wishes to make a statement, I am willing to allow him to do so.

Mr. Benn: These phoney points come up so regularly that it might be better if I said plainly to the House in answering the question that I took the responsibility for bringing it forward under the Industry Act. That meant that in my judgment as Secretary of State under the

provisions of the Act it was right to bring it up under that section, and that was the beginning and end of the matter.

Mr. Deputy Speaker: I am glad that the opinion I expressed has been confirmed.

2.2 a.m.

Mr. John Biffen: I understand that my right hon. and hon. Friends will be inviting a Division at the conclusion of the debate. I very much welcome that gesture because I am sure that it will be appreciated on both sides of the House that it will be more than early morning symbolism and will mark a substantial gesture of reserve and of suspicion about the use to which the powers of Section 8 of the Industry Act are being put. The longer this episode is drawn out and revealed to the House the deeper those suspicions become.
The intervention made by my hon. Friend the Member for Chichester (Mr. Nelson) is the latest point. Although the Secretary of State says that he takes full responsibility, I hope that when the debate is being wound up it will be made clear whether there was at any time an attempt to seek this credit guarantee from any source other than in accordance with the exercise of Section 8. That question is central to the whole consideration of the debate, in which our constituents are cast in the rôle of captive export credit financiers. On that basis no attempt has been made to justify to us, acting in trust on their behalf, the use that will be made of their funds. So far, no attempt has been made to demonstrate that there is a North American or other export market which may be satisfied with the scale of production which I assume is implicit in a three-factory solution for the motor cycle industry.
We want to know first why the Secretary of State has been so anxious to exercise his powers under Section 8 without seeking any other alternatives. Secondly, as our constituents are to become captive financiers, we should like to know a little more about the export prospects that have been assessed by the Secretary of State and the commercial arithmetic that lies behind this decision.
I will not detain the House long because I know that many of my hon. Friends wish to register their reserve and


unease about this enterprise. Anyone tracing the whole story of the NVT association with BSA cannot but be uneasy on two points. In retrospect I believe that many would now consider that receivership would have been the best solution when the crisis broke upon us in 1973. That view seemed to be sustained by the much-quoted report published by NVT.
Secondly, there is an unhealthy nemesis in the lawless work-in, the lawless sit-in, the lawless possession of the site at Meriden. I do not think we should suppose that this sort of success will pass unnoticed. The Secretary of State, when he was reproving my hon. Friend the Member for Henley (Mr. Heseltine), quoted from page 14 of the NVT story "Meriden: Historical Summary". Page 14 says:
The company was surprised to learn that the Minister was adamant that there should be no recourse to the law and that he, the Minister, would now see what he could do.
That was in the context of the position of the Meriden works. I do not think that, although the right hon. Gentleman quoted that reprovingly, anyone is under any illusion about the moral encouragement that was given from the Labour benches to those who possessed the works at Meriden. I believe that this carries serious moral implications.
It is an episode which will not just be an historical oddity. It will be repeated, and it is being repeated in the case of Imperial Typewriters. Sure enough, we will have the argument as to whether it is to be a one-site or two-site solution. I pay tribute to the hon. Member for Nuneaton (Mr. Huckfield) who has established standards of political virility in this area which are now being emulated, or sought to be emulated, by his hon. Friend the Member for Kingstonupon-Hull, East (Mr. Prescott), somewhat to the discomfort, so I observe, of his hon. Friend the Member for Leicester, South (Mr. Marshall).
We can detect some of the tensions that will necessarily arise once we allow this kind of sit-in to be the lever and the pressure for trying to obtain a politically-contrived solution, using the funds of constituents of those representing the rest of the country. Although I pick relatively modest instances, I do not think

that there can be any doubt but that this is the precursor for the real trial of strength which will attend what will be the outcome of the increasing Governmental involvement with British Leyland.

Mr. Benn: I am following the hon. Gentleman's remarks with great interest. He will recall that the most classic, successful, and justified work-in, was at Upper Clyde Shipbuilders, after a Tory Government had sought to close it down and then, as a result of the work-in, funded Marathon, Govan and the successor yards.

Mr. Biffen: We may draw conflicting conclusions from that episode. Many of us believe that, whatever the justifications at the time, this episode in the 1970–74 Conservative Government, led to much regret.
I will not be distracted from my main thesis—namely, that the happenings at Meriden, and the typewriter factory in Leicester and/or Kingston-upon-Hull are but skirmishes as a prelude to the battle which I think will be conducted over the location of investment with regard to British Leyland.

Mr. Leslie Huckfield: Hear, hear.

Mr. Biffen: That "Hear, hear" from the hon. Member for Nuneaton informs us that he agrees with my analysis. All the objectives, although they can be dignified as a highly important experiment—the words used by the hon. Member for Nuneaton—are designed to sustain the innate forces of industrial conservatism in this country.
At the end of the day we must take note of one of the conclusions in the NVT history of Meriden which, referring to the doctrine of "no-change" referred to by my hon. Friend the Member for Eastbourne (Mr. Gow), said
… if the doctrine is to be observed in an industry requiring a contracting labour force in any place for any reason, there will never again be any possibility of a rescue operation which of necessity involves changes …
I hope that has been noted by Sir Don Ryder, because in his own right when dealing with the printing unions and the printing works within IPC he showed a degree of decision and action which contrasts with what we are perceiving in the motor cycle industry.

Mr. Huckfield: Will the hon. Gentleman give way?

Mr. Biffen: No. I am bringing my remarks to a conclusion, and I do not want to enter into disagreement with the hon. Gentleman, after having carried him with me so far in agreement.
We deceive ourselves if we think that the closer association of politicians, industry and commerce can be the midwife of change. It will not. Those who believe that this country has to accommodate itself as best it can to the changing fortunes of international commerce should take this counsel and conclusion: the more Government are associated with industry in decline, the more they compound the difficulties of that decline, the more they postpone and exacerbate the final moment of truth.

2.14 a.m.

Mr. Tim Renton: It is always a pleasure to listen to the lucid remarks of my hon. Friend the Member for Oswestry (Mr. Biffen). I wish to take up his point about possible abuse of power by the right hon. Gentleman the Secretary of State for Industry in coming to the House tonight. I wish to make brief reference to the question of ECGD and the possibility that the assurance given to the House recently about ECGD by a Minister may have been abused in the course of the Meriden events which have brought us here tonight.
I should like briefly to recapitulate the problem. We have been told that the Meriden Co-operative already has ECGD facilities amounting to £6 million which evidently have not yet been used. In addition, the Secretary of State said that NVT needed a guarantee to finance its export stock, presumably to finance the stock held at its factory. He also said that NVT's United States cover had been withdrawn. He did not amplify that. I take it that he meant that the banking facilities available to NVT in the United States had been withdrawn.

Mr. Stanley: Since the Minister of State referred to the matter without being specific, he may wish to confirm that the Bank of America, which until now had an export credit finance arrangement to the value of 1·5 million dollars, recently discontinued that arrangement because of the uncertainties created for NVT because

of the Government decision to support the co-operative.

Mr. Renton: My hon. Friend has, with his usual accuracy, provided those detailed figures which the Secretary of State failed to provide earlier.
The withdrawal of cover brought NVT to such a parlous financial condition that an additional £8 million was required. Perhaps the Minister of State will amplify that matter when he winds up.
Having obtained the additional £8 million tonight, NVT will go to the ECGD for the export credit guarantees which it needs in addition to the £6 million ECGD guarantee available to Meriden. Will that guarantee be made available under Section 2 or Section 1 of the 1968 Act? Presumably it will be made available through Section 2, since that section permits loans and guarantees in the national interest. That situation has developed gradually over the years.
Speaking about the setting up of the ECGD, the Prime Minister, when he was President of the Board of Trade, said:
We have no intention of trying to guarantee exporters against unduly hazardous or quite crazy risks."—[Official Report, 8th February 1949; Vol. 461, c. 259.]
But the concept developed that it was right for loans and guarantees to be made available to exporters when these were considered by the Treasury, acting in concert with the Board of Trade, to be in the national interest. This opens up a wide area which is capable of abuse, especially with the present interventionist Government in office.
During the debate on the Second Reading of the Export Guarantees Amendment Bill my hon. Friend the Member for Worthing (Mr. Higgins) and I asked for a specific assurance from the Under-Secretary of State for Trade that Section 2 would not be used for political purposes in any way by the Government. The Under-Secretary gave an assurance that that was so. He said:
There can be no question of this Bill's being intended or used to enable the Government to circumvent assurances previously given to the House about ECGD operations and the avoidance of unduly hazardous risks.
Later he said:
The hon. Member for Gosport also suggested that the Government were using ECGD facilities for their own purposes. I give him


a categorical assurance that that is not so."—[OFFICIAL REPORT, 10th February 1975; Vol. 886, cc. 156, 159.]
Will the Minister of State tell us whether that is correct, because it seems to me that, under the Industry Act, money is being made available to NVT, which, being then put in a commercially viable position, can go to the Export Credit Department and ask for export guarantees? The ECGD can then hand these to NVT with a clear conscience because it sees a reasonably safe balance sheet. How is that balance sheet safe? Because the Secretary of State for Industry has put the money there. If that is not using ECGD for political purposes, what is it? This is a plot hatched out in Victoria Street between the Secretary of State for Trade and the Secretary of State for Industry; it is robbing Peter to pay Paul and is in breach of the assurances that the Minister gave to the House.

Mr. Stanley: In case hon. Gentlemen opposite should be tempted to suggest that this was done by the Conservative Government, my hon. Friend will recall that the existing ECGD finance which Norton Villiers Triumph has already got and which has just run out was export credit properly obtained in the normal way through ECGD under Section 1.

Mr. Renton: Again, I thank my hon. Friend. There is an essential difference here, as I have tried to explain, between Section 1, which covers ECGD finance made available on a commercial basis only, and Section 2, which is in the national interest.
I do not wish to detain the House longer on this matter. I think that the Minister of State, in replying to the debate, should give a specific assurance that this availability of export credit facilities to NVT will be submitted to and looked at by the advisory council of the ECGD. I realise that is not what normally happens with Section 2 facilities, but in this instance there must be a clear suspicion that ECGD has been leaned on or that money has been withheld from NVT until this point when, with the money now coming forward from public funds, NVT can go to ECGD and credit facilities that have not been available to it for export will be made available, thanks to the assistance of the

Secretary of State for Industry. We need the advisory council of the ECGD to tell us that this has not happened. Until then, we must be very suspicious of the pressures that have been put on ECGD through the Secretary of State for Trade.

2.22 a.m.

Mr. Graham Page: I am anxious to know what the House is being asked to authorise tonight. The motion is very brief. It is on the Order Paper because it is necessary to have this authority under Section 8(8) of the Industry Act 1972, which provides:
The sums which the Secretary of State pays or undertakes to pay by way of financial assistance under this section in respect of any one project shall not exceed £5 million, except so far as any excess over the said sum of £5 million has been authorised by a resolution of the Commons House of Parliament.
Therefore, this House is asked to authorise a specific excess sum which must be paid by way of financial assistance in respect of any one project. The motion does not give any indication of the way in which the financial assistance is to be given nor to whom it is to be paid. It does not specify the project nor properly limit the sum.
There is a precedent for the right form of motion. Indeed, it is a precedent in the name of the Secretary of State for Industry. On the Order Paper of 18th December 1974 there appeared a motion in what I think is the right form. It indicated to the House exactly what it was asked to authorise. The motion, which related to the British Leyland Motor Corporation Ltd., started in the same way as the present motion, but it had these words explaining what was to be authorised:
a guarantee or guarantees to be given to the bankers of British Leyland Motor Corporation Limited and any of its subsidiaries covering borrowing facilities made available by the bankers to those companies".
There was a clear statement of what the House was asked to authorise—a guarantee or guarantees—a clear statement relating to whom it was to be paid—the bankers—and a statement of the project.
In the motion before the House tonight there is no indication of the method of financial assistance. The Secretary of State gave us some indication in his opening speech, but if we authorise him to make a payment in accordance with the motion we shall provide a blank


cheque in terms of to whom it may be paid and the way in which he may offer that assistance.

Mr. Nelson: Will my right hon. Friend go further and agree that the motion does not give any indication, first, whether there has been any counter-indemnity for this guarantee; secondly, whether there will be security or transference of security in the exercise of that guarantee; thirdly, of any time limit when the guarantee will expire; fourthly, whether the principal sum relating to the guarantee covers rolled-up interest? Finally, does my right hon. Friend agree that the rolled-up interest might amount to another £4 million over three years?

Mr. Page: I am grateful to my hon. Friend for that intervention, but perhaps I should stick to the point of what should be in the motion.
As it is a motion authorising payment, or undertaking to pay by way of financial assistance, one looks at the earlier part of Section 8 of the 1972 Act to find out what is meant by "financial assistance". Subsection (2) says:
Financial assistance under this section may, subject to the following provisions of this section, be given in any of the ways set out in subsection (3) of the last preceding section.
If one turns back to Section 7(3), one sees that there are four paragraphs, (a), (b), (c) and (d), which set out the different ways in which financial assistance may be given, The first is
investment by acquisition of loan or share capital".
Secondly,
investment by the acquisition of any undertaking or of any assets".
Thirdly,
a loan, whether secured or unsecured",
and, fourthly,
any form of insurance or guarantee.
I understand from what the Secretary of State said that in this case it is by way of a form of guarantee, but this is not what the House is being asked to authorise.
This is not just a technical point of procedure, because unless there is in the motion the way in which financial assistance is to be given the House has no opportunity of knowing whether it is

being given lawfully or unlawfully. Section 8 contains restrictions on the use of these various methods of providing financial assistance. One has already been referred to; namely, that
Financial assistance shall not be given under this section in the way described in subsection (3)(a) of the last preceding section",
and that is the acquisition of loans or shares in the company.
We have the precedent of a previous motion. [Interruption.] It is a little difficult to shout down the Secretary of State all the time while I am speaking. I do not mind doing it for part of the time. I am sure that the right hon. Gentleman wholly lacks interest in whether or not the motion is legal, but I am endeavouring to protect the House against establishing a precedent which is wrong. If the right hon. Gentleman has not heard before, let me tell him that I am using his precedent to show that this one is wrong. He should have used the precedent in setting out what the House was asked to authorise. I do not know whether there is any sinister motive in this, but we do not know what method of financial assistance we are being asked to authorise. We do not know to whom the money will be paid, and this should appear in the motion.
I am suspicious merely on the drafting. I do not know whether there is anything sinister about this, but the drafting is terrible. The last line of the motion authorises the provision of
sums exceeding £5 million but not exceeding
something over £12 million. As I read that, any number of sums could be paid if they came within that limit. It should be the aggregate sum. In fact, that is used in the Act itself. So not only is the motion badly drafted but it is not in accordance with the appropriate section of the Act. This is a bad precedent, and I for one would never vote for a motion of this sort even if I thought the merits were good.

2.30 a.m.

Mr. Peter Viggers: The Secretary of State has come to ask us for votes but has not give us any facts. The hon. Member for Nuneaton (Mr. Huckfield) has made clear that full investigation has been made of the viability of the Meriden project, but we have not been told any of the facts


which one would expect of any commercial project: detailed plans for proposed or expected turnovers, of sales targets or profits, or of return on capital employed, the capital of people who pay taxes.
If the Secretary of State seriously expects us to vote in favour of his proposal he must realise that when a workers' co-operative or some other project found favourable by him comes before the House the normal laws of gravity are not suspended, apples do not cease to fall from trees, and we must know the basic commercial facts of return on capital employed.

2.31 a.m.

Mr. Nicholas Fairbairn: Is it not extraordinary that when we are discussing in Parliament the concept that we should make British industry more efficient, which we are discussing in the Industry Bill, the Government should ask us to provide funds to a company to enable a co-operative to produce products which neither economically nor on any commercial basis are viable? Is that not an extraordinary way of behaving in the present financial situation of the country, to show contempt for the principle in which the Government pretend they are interested? There is no criticism of the work force. Is it not extraordinary, in our present plight, that this muddled and asinine proposal should be upstairs and downstairs at the same time?

2.32 a.m.

Mr. George Park: I rise to speak because I was surprised tonight at the hon. Member for Oswestry (Mr. Biffen). I would never have thought to accuse him of double standards. He did not use them in previous excursions in Coventry. He may not remember me, but I remember him.
The hon. Member seemed to be saying that it was entirely wrong for a group of work people to fight tooth and nail to retain their right to work, to retain their pride in their craft. That was wrong, apparently, but during the proceedings on the Finance Bill, and in Committee, it is all right for hon. Members opposite to fight tooth and nail for the way of life they think right and to behave in an abominable way. I was

rather surprised to hear that comment from the hon. Member for Oswestry. He tried to deal with some of the industrial aspects, however, whereas his colleagues cannot get past the financial considerations.
Right at the root of the Norton Villiers Triumph shambles was the accountants' decision that they did not want three factories any more. They needed only two, and one was to be shut and, in the time-honoured word, rationalisation brought in and the Meriden men thrown out of work. While hon. Members opposite are considering the financial aspects, it would do them some good now and again to think about the human beings who lie behind the balance sheets about which they are so concerned.
When one looks at the motor cycle industry—and my hon. Friend spoke about the super-bike part of the market—let us not forget that it was the same motor cycle industry which calmly and tamely handed over the rest of the market for smaller-engined bikes to any who like to come into this country. This selfsame industry, which hon. Members are so interested in protecting now financially, is still making no effort to try to get back into that part of the market.
As I understand it, the motion is an endeavour, at any rate, to retain a toehold in the super-bike aspect of the market, but I hope that it is the forerunner of a vigorous drive towards recapturing that part of the market which we formerly held.

2.36 a.m.

Mr. Tom King: I shall intervene in the debate only briefly because what has emerged clearly from all the speeches, certainly those from the Opposition side, is that we want to allow plenty of time for the Minister of State to reply to some very direct and specific questions.
I entirely agree with the hon. Member for Colne Valley (Mr. Wainwright) that we have not heard anything about what we really need to know in relation to the uncertainties that have been aired. There is a very nasty feeling in the House at present that what has been put before us is not really what it is all about. It is a matter of great importance that this matter is properly explained by the Minister.
I start by laying one lie—that the Opposition are not interested in the motor cycle industry. The company which is the subject of the motion was set up by my right hon. Friend—as he then was—the former Member for Chichester, Mr. Chataway. This was our attempt to restructure the British motor cycle industry—not because we were not interested in it but because we realised the contribution it could make and its export potential, and the skills that existed in the industry. It was our attempt to harness them.
But what is the situation that we face tonight? We face a tragedy that affects every person in this country. As my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) said, we have lost, effectively, two years of motor cycle exports to a market which is still buoyant and has been expanding very rapidly in the United States. In our present balance of payments situation, where exports are increasingly difficult to obtain, that is a luxury that we cannot afford.
I refute the suggestion that the Opposition are not concerned about employment. We share the same concern for employment as the employees at Small Heath, as to whether this superficial attempt to protect employment initially at Meriden—for that is what is behind the motion—will jeopardise the future employment of a considerable number of people.
It is against that background that we are concerned about employment. The hon. Member for Meriden (Mr. Tomlinson) said that people were fighting for the right to work. Mr. Poore has been quoted frequently. He seems to be everyone's best friend tonight. I should like to quote from page 16 of his report:
The majority of the … employees at Meriden were making arrangements to accept other employment … It was clear that ample vacancies existed in the Coventry area.…Furthermore, NVT had received no less than thirty-two enquiries evincing interest in purchasing the Meriden factory.
Obviously there must be concern for people who lose their jobs, but in that situation all the evidence shows that the risk was not so great. The fact was—this is the point to which the Minister will have to address himself—that, while, unfortunately, it was necessary to consider

the closure of Meriden, this did produce a viable two-factory activity. What has now happened, with the encouragement of the Secretary of State, is that the co-operative has been encouraged to continue and now the viability of the whole lot is in question, and there is a threat to the employment of everyone concerned.
The hon. Member for Nuneaton (Mr. Huckfield) referred to the history of the matter and spoke about the lack of controls in the offer made by the Conservative Government. I would merely refer him to Hansard of 11th June 1973 in which is spelt out very clearly by Mr. Christopher Chataway, who was then the Minister for Industrial Development, the terms and strict conditions under which that money was made available.
My hon. Friend the Member for Eastbourne (Mr. Gow) rightly raised a matter on which I do not propose to dwell. I think it is the unhappiest incident that I can recall since I have been in the House, but it is not fundamental to the problems of the motor cycle industry. I refer to the extraordinary way in which this motion has come forward. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) said that the motion is in the "No" Lobby and that anybody who cannot read it is an illiterate. One person who must be included in that description is the Leader of the House, because for some reason we have never had explained the piece of paper which the Leader of the House had in his hand—the hon. Member for Colne Valley referred to it—apparently contained a sentence which he did not read out during the Business Statement on Thursday. So among the more famous illiterates in the House must be the Leader of the House.
This has all added to the strange feeling we have had about the way in which the order has come forward. Many believed that it might come forward on Wednesday, but it was not mentioned by the Leader of the House. Then the matter proceeded, when allegations were made which, when the chairman of the company was telephoned, were found to be quite incorrect. This has added to what the hon. Member for Perry Barr has called the history of this fiasco. That is a description which I would accept.
I am reminded of a remark made by my hon. Friend the Member for Oswestry


(Mr. Biffen) on the previous occasion when my party was in government and he said that he did not wish to see the taxpayer becoming a pillion passenger to Mr. Dennis Poore. I remember that phrase well. But we now face a whole host of taxpayers being made to climb on the same motor cycle.

Mr. Bob Cryer: rose—

Mr. King: The hon. Member has not been here for most of the debate. I am anxious to conclude my remarks because it is important that the Minister should have ample time in which to reply.
My hon. Friend, in a most impressive speech, gave a very clear warning of the way in which we are going and the dangers which are implicit in this situation, of illegal sit-ins being subsequently funded by Government funds. The problems of industrial conservatism which it will raise are very real indeed.

Mr. Cryer: rose—

Mr. King: I am sorry, but the hon. Member has not been in the Chamber for much of the debate.

Mr. Cryer: I have.

Mr. King: There are some important questions which need to be answered. As my hon. Friend the Member for Oswestry said, the Secretary of State failed to explain any of the real issues at stake. What is behind the whole issue is a statement that the right hon. Gentleman made on 29th July 1974:
I have made it clear to the co-operative that this offer is the limit of the financial assistance the Government are prepared to make available."—[Official Report, 29th July 1974; Vol. 878, c. 16.]
That refers to the original £4·95 million. This is where the problem has arisen. The Secretary of State has found that that was not enough. He had not got the export credit guarantee finance. He found that with a three-factory solution he would need still more money. Now we have a situation in which surprisingly—the statement has apparently been made today, although my hon. Friends have not been able to see it—in some way, without seeking parliamentary approval, the ECGD cover has been obtained for the finance for Meriden. So the right hon. Gentleman has to come to this House only under the NVT umbrella and in the name of

NVT. He is, by the side door, achieving the finance which the creation of the co-operative, if it is to operate, has made inevitable. That is a further distortion that the right hon. Gentleman has set before the House tonight.
The Minister of State must answer certain specific questions. Is it correct that this export credit guarantee was refused by ECGD? Is it correct that the Secretary of State is taking this action because it is not open to the company to obtain the money through ECGD and there is no alternative source of that money? What is the position of the three-factory solution? What can he say about the prospects of future employment for all those who work in these three factories? Is the £15 million still going to have to be made available, and is it true that on this basis this will not be a viable and profitable activity until 1979? What is the security of job employment for those who work at Small Heath?
It is against this background and in view of these specific questions that we shall vote against the Government tonight. We do so not because we are against the British motor cycle industry or because we do not want it to succeed. We do it because we know that there are other ways in which this money can be brought forward and because of the deceitful, irresponsible and dilatory way in which the Secretary of State has handled this whole matter.

2.47 a.m.

The Minister of State, Department of Industry (Mr. Eric S. Heffer): The Conservatives have tonight delivered an interesting series of speeches which have ranged over a wide area. I think that about 136 questions have been asked, all of which I am apparently expected to answer in the next 20 minutes. I shall endeavour to answer what I regard as the most important questions. Others which are not answered will have to continue to be put to Ministers, probably in the form of priority Written Questions. That is the way in which similar questions about this and other co-operatives have been tabled in the past.
The hon. Member for Henley (Mr. Heseltine), in one of his usual moderate speeches, said that the amount that was to be granted to the Meriden co-operative was below £5 million. He suggested that


the Government were, therefore, deliberately trying to avoid discussion of this issue in the House. The hon. Member and certain of his hon. Friends made a great deal of that point. He must understand, therefore, that the amount of money that was pushed into NVT was also less than £5 million. There was no discussion in the House on that. Even Conservative Members complained about that because they did not like the 1972 Act.

Mr. Heseltine: I stand to be corrected, but I seem to recall that we arranged for a statement in the House at the time of the injection of funds into NVT so that the House could discuss it.

Mr. Leslie Huckfield: Rubbish.

Mr. Heffer: The hon. Gentleman must know that a statement is not the same as a debate. Under the 1972 Act there is no need for a debate. The hon. Gentleman made a great point that the Government were providing less than £5 million to a worker co-operative when his Government did precisely the same in relation to NVT, with no discussion whatsoever.
The hon. Gentleman made a number of of other statements which we have discussed before. He referred to the advice IDAB gave to the Government. I thought that we discussed that matter the other evening, when we made it clear that the Government were always willing, quite rightly, to accept the advice of IDAB or anyone else, but that in the last analysis Ministers must be prepared to take their own decisions, because they are the elected representatives of the people, and that they must be prepared to answer for their decisions in the House. That is exactly what we are doing on this matter.
The Opposition have seen something sinister about the question of the ECGD cover. It amazes me how they get so upset about matters which they would find to be simple if only they would look at the facts. The Government could have given the entire cover, but Ministers discussed the matter and decided that the £8 million should come as a guarantee under the Industry Act. I sometimes think that the Opposition believe that my right hon. Friend takes all the decisions on every matter, as though he is not part

of a collective Government. [HON. MEMBERS: "Oh."] That is what they wish to believe. Then when my right hon. Friend the Prime Minister explains, in a speech made in my part of the world, that we take our decisions collectively, they say "This is done only because the Secretary of State is trying to do things on his own."
The hon. Gentleman, who has been in government, knows that no Minister takes decisions off his own bat. They must be discussed with his colleagues. When a decision is taken, it is taken on that basis. Conservative Members know that as well as I do. The Government's collective decision was that £4 million should be guaranteed under the ECGD, but we believed the other further guarantees should be under the Industry Act.

Mr. Peter Rost: rose—

Mr. Heffer: Let me make the position quite clear. We are talking about guarantees. Some Conservative Members seem to think that they are loans or grants. They get the whole situation confused. We are dealing with guarantees that may never be drawn upon.

Mr. Rost: rose—

Mr. Heffer: Of course, they may be drawn upon. I was telling the House why the extra guarantees are required.

Mr. Eldon Griffiths: Tell us.

Mr. Heffer: Yes, I will. I shall not quote the relevant letter because it is a private letter. Apparently the hon. Member for Henley quotes private letters. It is clearly understood by the management that because of the intervention of my right hon. Friend and the trade unions production at the NVT plant has increased. Therefore, it can sell much more on the American market than in the past. Incidentally, it is not right to suggest that the American market has gone down. The American market has gone up. What has happened is that our share of the market has gone down. It is now possible for us to regain a greater share of the American market—[Interruption.] It is all right for Conservative Members to laugh. Some of them are


interested not in production but in finance. They are not interested in production and in the workers in the industry.

Mr. Heseltine: If it is so much to the credit of the Secretary of State that the extra finance guarantees are required, why is it that Mr. Poore and Mr. Chataway discussed the need for an additional £8 million before the Conservative Government left office?

Mr. Heffer: I suggest that the hon. Gentleman puts that question to Mr. Poore and Mr. Chataway. I have only the hon. Gentleman's word for that. I do not know whether such a discussion took place.
The hon. Members for Henley and Bridgwater (Mr. King) have suggested that all the difficulties faced by the motor cycle industry in the past 12 months have been the responsibility of my right hon. Friend and the Government because of our apparent encouragement to the workers at Meriden to set up a co-operative. I draw the attention of the House to the famous "Blue Book". We have had plenty of pages quoted and I do not see why I should not quote page 15. It reads:
On the morning of 30th November, 1973, the meeting opened in the office of Mr. Chataway. Mr. Poore and Mr. Fawn represented the company, Mr. Urwin and Mr. Lapworth came for the T&amp;GWU. The AUEW had apparently declined the invitation. … By midday, the suggestion had been made by the Minister that work should resume at the factory on the basis of a labour only contract, commonly described as 'the lump', although in this case without the inference that there was any avoidance of income tax in prospect. This arrangement would carry on until July, 1974, which was the date originally planned by NVT up to which production would continue. … This proposal, which became Plan 5, was accepted in principle by those present, subject to confirmation by the Meriden pickets.
It is said that we are the people who have been encouraging the workers and that at the time there were no discussions with Conservative Ministers, but the quotation goes on:
It did not occur to anyone at the time that the Minister's decision to negotiate directly with the men who were illegally occupying NVT's premises at Meriden would be seen both by the pickets and by others as giving a government seal of approval to the illegal action.

When we came into office a year ago, this problem came right on to our desks. It was going on then. We had to pick up the pieces of the situation and sort out matters. That is precisely what we have been doing in these past 12 difficult months during which we have been dealing with the problem at Meriden.
I was asked about the NRDC. I have been asked a great many questions and apparently I am expected to reply to all of them in about 20 minutes. It has been said that my right hon. Friend held back NRDC assistance as a form of blackmail. The true position is that last year a proposal was submitted to my right hon. Friend for approval. It concerned the development of new designs of motor cycle. By agreement between the NVT and the NRDC, the proposal was withdrawn. [HON. MEMBERS: "Get to the point."] It is no good hon. Members asking questions and then saying "Get to the point" while I am in the process of answering those questions. Either they want the answers or they do not. I was saying that a new submission was likely to be made. If it is, we shall give it great consideration and sympathy.
The hon. Member for Mid-Sussex (Mr. Renton) asked a question concerned with the export guarantee legislation and the £8 million. It is not coming under that legislation. It is coming under the Industry Act 1972, and I have explained why. There is nothing sinister about this. This is a decision by the Government to assist the development of exports to the United States, to win a large share of the American market for British motor cycles.

Mr. Tim Renton: Does the Minister agree that he has just said that he could have told the ECGD to provide the £8 million, but that he and his fellow Minister decided not to do so? How can he have done that in view of the assurance of one of his colleagues that the Government would not use ECGD for political purposes?

Mr. Heffer: The hon. Gentleman must know that if the guarantees were given under ECGD there would not have been this sort of discussion in the House. It was considered by the Government that this was the right way to get authority to deal with it. It was not the only way. We considered that it was the right way,


and that is why we are now having a discussion of this matter in the House because it comes under Section 8 of the Industry Act. It gives the House an opportunity to debate and discuss the position and finally to take a decision on it.

Mr. Nelson: The hon. Gentleman has said that the money could have been provided in some other way. I tried to make the point specifically that if it can be provided in some other way than under the terms of subsections of Section 8, it cannot be provided under that Section of the 1972 Act. Therefore, it is not legal to put this motion before the House. It is a simple assurance we seek. If the hon. Gentleman gives it, it is illegal.

Mr. Heffer: I have tried to explain to the hon. Gentleman that the Government considered that this was the right and appropriate way.

Mr. Nelson: It was not the only way.

Mr. Heffer: I do not say it was the only way. I said that it was the appropriate and the right way. [Interruption.] I do no know whether the hon. Gentleman now puts himself above the authority of the Government—[Interruption.]

Mr. Heseltine: rose—

Mr. Heffer: The point I am making is that this was a decision of the Government because it was considered to be the appropriate, correct and right way for this guarantee.
The hon. Gentleman, like many of his hon. Friends, has been nit-picking on this question the whole of the evening. Either they are concerned with genuinely assisting our motor cycle industry and with winning markets and with keeping the workers in employment at Small Heath and Wolverhampton and with

developing the Meriden site, or they are not.

It will be very interesting for the people to know that for three hours the Tory Opposition have opposed the Government in coming forward with guarantees in order to help the motor cycle industry and the workers in it to win exports in the United States of America.

Mr. Heseltine: rose—

Mr. Heffer: I think that the hon. Gentleman and the House will accept that I give way a great number of times to interventions. I am often criticised by my hon. Friends who think that I give way much too often. But because I am basically a courteous Member I give way to hon. Members who intervene. But I am not prepared, within the last minute of the debate, to give way at this stage.
I say to the hon. Gentleman that in my view the people of this country will take very serious note of the fact that there has been all this nit-picking by hon. Members on his side of the House. I am convinced that when the people in the Midlands understand the nature of the opposition to the motion and the Opposition's almost pathological hatred of the workers' co-operative, they will recognise that the Opposition are no longer a serious Opposition but are far more concerned with financial aspects than with genuine production.

Mr. Heseltine: rose—

Mr. Walter Harrison (Treasurer of Her Majesty's Household): rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly:—

The House divided: Ayes 116, Noes 76.

Division No. 130.]
AYES
[3.11 a.m.


Armstrong, Ernest
Callaghan, Jim (Middleton &amp; P)
Cryer, Bob


Ashton, Joe
Campbell, Ian
Dalyell, Tam


Atkinson, Norman
Canavan, Dennis
Davidson, Arthur


Bagier, Gordon A. T.
Carmichael, Neil
Davies, Ifor (Gower)


Bates, Alf
Clemitson, Ivor
Deakins, Eric


Bean, R. E.
Cocks, Michael (Bristol S)
Dean, Joseph (Leeds West)


Benn, Rt Hon Anthony Wedgwood
Cohen, Stanley
Dempsey, James


Bennett, Andrew (Stockport N)
Coleman, Donald
Doig, Peter


Blenkinsop, Arthur
Conlan, Bernard
Dunn, James A.


Boothroyd, Miss Betty
Cook, Robin F. (Edin C)
Edelman, Maurice


Bray, Dr Jeremy
Cox, Thomas (Tooting)
Ellis, John (Brigg &amp; Scun)


Buchan, Norman
Craigen, J. M. (Maryhill)
Evans, John (Newton)




Ewing, Harry (Stirling)
Mackenzie, Gregor
Silverman, Julius


Flannery, Martin
McMillan, Tom (Glasgow C)
Skinner, Dennis


Fletcher, Ted (Darlington)
Madden, Max
Small, William


Forrester, John
Marks, Kenneth
Smith, John (N Lanarkshire)


Garrett, John (Norwich S)
Marshall, Dr Edmund (Goole)
Snape, Peter


Golding, John
Meacher, Michael
Spearing, Nigel


Grant, John (Islington C)
Mikardo, Ian
Stallard, A. W.


Hamilton, James (Bothwell)
Morris, Charles R. (Openshaw)
Stewart, Rt Hon M. (Fulham)


Hardy, Peter
Newens, Stanley
Stoddart, David


Harper, Joseph
Noble, Mike
Summerskill, Hon Dr Shirley


Harrison, Walter (Wakefield)
Ogden, Eric
Taylor, Mrs Ann (Bolton W)


Hattersley, Rt Hon Roy
O'Halloran, Michael
Thomas, Ron (Bristol NW)


Heffer, Eric S.
Ovenden, John
Tinn, James


Hooley, Frank
Palmer, Arthur
Tomlinson, John


Howell, Denis (B'ham, Sm H)
Park, George
Wainwright, Edwin (Dearne V)


Hoyle, Doug (Nelson)
Parker, John
Walden, Brian (B'ham, L'dyw'd)


Huckfield, Les
Parry, Robert
Walker, Terry (Kingswood)


Hunter, Adam
Pendry, Tom
Watt, Hamish


Jackson, Colin (Brighouse)
Prescott, John
White, Frank R. (Bury)


Jackson, Miss Margaret (Lincoln)
Price, C. (Lewisham W)
White, James (Pollok)


Kerr, Russell
Radice, Giles
Whitehead, Phillip


Kinnock, Neil
Richardson, Miss Jo
Wise, Mrs Audrey


Lambie, David
Robertson, John (Paisley)
Woodall, Alec


Lamond, James
Roderick, Caerwyn
Young, David (Bolton E)


Leadbitter, Ted
Rodgers, George (Chorley)



Lyons, Edward (Bradford W)
Rooker, J. W.
TELLERS FOR THE AYES:


McCartney, Hugh
Sedgemore, Brian
Mr. Laurie Pavitt and


McGuire, Michael (Ince)
Sillars, James
Mr. J. D. Dormand




NOES


Alison, Michael
Howe, Rt Hn Sir Geoffrey
Rhys Williams, Sir Brandon


Benyon, W.
Joseph, Rt Hon Sir Keith
Ridley, Hon Nicholas


Berry, Hon Anthony
Kimball, Marcus
Roberts, Michael (Cardiff NW)


Biffen, John
King, Tom (Bridgwater)
Rossi, Hugh (Hornsey)


Bowden, A. (Brighton, Kemptown)
Kitson, Sir Timothy
Rost, Peter (SE Derbyshire)


Brotherton, Michael
Knight, Mrs Jill
Royle, Sir Anthony


Buchanan-Smith, Alick
Lawrence, Ivan
Sainsbury, Tim


Butler, Adam (Bosworth)
Luce, Richard
Scott-Hopkins, James


Carlisle, Mark
Marshall, Michael (Arundel)
Shaw, Michael (Scarborough)


Churchill, W. S.
Mayhew, Patrick
Shepherd, Colin


Clarke, Kenneth (Rushcliffe)
Miller, Hal (Bromsgrove)
Silvester, Fred


Cope, John
Moate, Roger
Sinclair, Sir George


Dodsworth, Geoffrey
Monro, Hector
Stanley, John


Durant, Tony
More, Jasper (Ludlow)
Stradling Thomas, J.


Eden, Rt Hon Sir John
Morgan-Giles, Rear-Admiral
Tebbit, Norman


Edwards, Nicholas (Pembroke)
Neave, Airey
Viggers, Peter


Emery, Peter
Nelson, Anthony
Wainwright, Richard (Colne V)


Fisher, Sir Nigel
Onslow, Cranley
Warren, Kenneth


Fowler, Norman (Sutton C'f'd)
Oppenheim, Mrs Sally
Weatherill, Bernard


Fox, Marcus
Page, Rt Hon R. Graham (Crosby)
Wells, John


Gilmour, Sir John (East Fife)
Parkinson, Cecil
Winterton, Nicholas


Goodhart, Philip
Pattie, Geoffrey
Younger, Hon George


Gorst, John
Penhaligon, David



Gow, Ian (Eastbourne)
Percival, Ian
TELLERS FOR THE NOES:


Griffiths, Eldon
Powell, Rt Hon J. Enoch
Mr. Spencer Le Marchant and


Grylls, Michael
Raison, Timothy
Mr. Russell Fairgrieve


Heseltine, Michael
Renton, Tim (Mid-Sussex)

Question accordingly agreed to.

Resolved,
That this House authorises the Secretary of State to pay or undertake to pay by way of financial assistance under section 8 of the Industry Act 1972 in respect of the business carried on by Norton Villiers Triumph Ltd. sums exceeding £5 million but not exceeding £12·872 million.

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thomas Cox.]

BARNES (ENVIRONMENT)

3.20 a.m.

Sir Anthony Royle: I apologise to the Minister for again dragging him here at an early hour in the morning to answer a debate on the environment in an area in my constituency. I give fair warning that I was dissatisfied with the substance of his last reply to me—not with its manner, because he delivered his speech with great courtesy. That earlier debate dealt with


Kew, and I shall return on future occasions to the needs of my constituency, which is suffering from aircraft noise, juggernaut lorries and other environmental depredations. I shall do this until the Government take some action and bring pressure on the Greater London Council, the major local authority responsible for my constituency.
Tonight I wish to raise the problem of the environment in Barnes. Barnes is an area in my constituency lying between the River Thames and Richmond Park. It is an area of great character, close to Central London, and about quarter of an hour's drive from the House. Although it is so close to Central London, it still retains a great deal of beauty with its open spaces, the river, St. Paul's School, and the famous Barnes Common which runs close to the edge of Richmond Park. Barnes Village is precious and should be protected and cherished. Also in the area there are many old and well-kept houses of the eighteenth and early nineteenth centuries.
The Minister knows from correspondence that Barnes is well represented on the Richmond-on-Thames Borough Council by three hard-working councillors who do a great deal of work in pursuing the interests of Barnes ratepayers. There are also several excellent amenity associations active in the area, and this includes the organisation known as the Barnes Community Association.
Barnes is now in danger of being brutalised. That is the only way to describe it. Why is this so? The main reason lies in the total disinterest of the GLC. It is precisely the same situation which applies to Kew. The GLC just does not seem to be interested in my constituency. It is not interested in Kew. It takes no action to stop juggernaut lorries going through the area, and the same applies to Barnes. The one way in which this brutalisation is taking place is in activity overhead. Aircraft noise constantly drums into the ears of residents of Barnes. Barnes lies directly under the glidepath to London Airport. Although I should like to expand on that matter, this is not the time to do so since it is not the direct responsibility of the Minister.
There is another air matter I wish to raise. The area of activity which comes within the Minister's responsibility is the use of helicopters over Barnes. These machines fly at regular intervals along the river and cross Barnes out to the west via Battersea Heliport. There is widespread resentment over the use of these aircraft. The Civil Aviation Authority now talks of 36,000 movements a year by 1980, which is three times the present level.
I agree with the four points made recently by the Heathrow Association for the Control of Air Noise in a recent document which it sent to the Greater London Council. I agree that helicopter noise must be treated as a form of pollution. It is in the power of the GLC to reduce that pollution drastically if it is encouraged by the Minister to do so. Such action would be for the benefit of many and the harm of no one.
Secondly, the Minister must realise that there are a large number of people who suffer from it, especially the western areas of London. They suffer noise from both a large share of helicopter flights and from aircraft.
The third point is the necessity to turn down the application which Westland Limited has put forward for a new licence to operate the Battersea Heliport after 30th June 1975, together with a proposal for an increase in the authorised number of flights.
The last point is that the present operator of the Battersea Heliport, Westland Limited, has consistently flouted the regulations about the authorised maximum number of flights. The excess was over 50 per cent. in 1973 and about the same in 1974. This is not good enough.
I ask the Minister for an assurance that he will urgently consult the GLC to tackle this problem.
A suggestion has been made that the flights should be increased from 4,000 to 6,000 during the coming year. The Richmond-upon-Thames Council has protested but the GLC, as usual, does nothing. I ask that the Minister should consider the matter urgently.
The second issue I wish to discuss is the brutalisation taking place in Barnes on the ground. The main menace is the same as that at Kew. I raised this matter


during the debate last year. The Minister went to some trouble to write to me after the debate, and I am grateful.
The juggernaut lorries are just as bad in Barnes as in Kew. I should like to read an extract from a letter which I received from a distinguished constituent, Sir John Pilcher, who was our ambassador in Japan until two or three years ago. He lives in The Terrace on the edge of Barnes Village. He writes:
Since the near-completion of the motorway M3, heavy lorries in increasing numbers have come to use The Terrace as a short cut on their way in and out of London. They are entirely unsuited to this road, which is too narrow for them. They pass at an excessive speed and endanger the life and limb of pedestrians for whom The Terrace is a favourite walk along the river. It is virtually impossible now to use the seats provided on the riverbank, because of the noise caused by these lorries; it is even difficult to cross the road to reach this once agreeable local amenity. One lorry has already jackknifed a shop by the junction of The Terrace and Barnes High Street. Mothers bringing children to the nursery school at the White Hart Lane end of The Terrace are endangered by them.
Moreover, heavy lorries are shaking and damaging the old houses in The Terrace. These merit respect, since they constitute the characteristic and historic Barnes riverfront, which is a conservation area and should be reserved for residents and recreation.
May we therefore ask for an assurance that swift measures are to be taken to prevent lorries from using The Terrace altogether and that unnecessary through traffic is to be diverted from using this route? Traffic should as far as possible be directed over Chiswick Bridge or along the South Circular Road.
I have said the same on many occasions in the past. This letter, which was written by Sir John Pilcher to the Director of Development Traffic Commissioner at County Hall, received, as is usual for the Greater London Council, no action. There was an acknowledgment, but no action was taken to deal with the problem. Rumours merely filtered out. Now we have had copies of a draft consultation document from the GLC which implies that in future—we are not told when—the juggernaut lorries might be banned from Barnes, but no indication is given of when that will happen. The situation continues to worry residents in the village. I hope that the Minister will be able to take some action. I ask for an assurance tonight that heavy lorries will be banned from The Terrace, Barnes High Street and Mortlake forthwith. I am certain that if the Minister

asked the GLC to take action it would have to do so.
My next point is about the riverside land. I mentioned that one part of Barnes borders on the river. This is a particularly beautful area. It is seen by people not only going up- or down-river from or to the Port of London but using the walks on the Chiswick side of the River Thames.
There has been correspondence between the Richmond-upon-Thames Borough Council and the Department regarding the possibility of a grant of £800,000 for this land. That has consistently been refused. I am not making any party political point, because the Minister's predecessors in the previous Government also appeared not to be particularly interested in providing a grant in order that this land might be safeguarded.
This land by the river, apart from a small school which is to be built for Swedish nationals, is London's just as much as it is Barnes' heritage. Surely it is worth considering whether this open space should be saved for the nation. I recognise the financial constraints upon the Government in our present economic situation, but I ask the Minister to assure me tonight that he will have another look at this matter and will reconsider the letter that he sent to me on 17th February confirming the decision turning down Richmond's application for this grant.
I should now like finally to raise a matter which, for once, is not the responsibility of the GLC. I refer to the way that small shops are rapidly closing in Barnes. This situation is changing the face of the village. I know that this is happening not only in Barnes but in many other such communities throughout the country. This problem is largely due elsewhere to the development of supermarkets and bigger stores, but in Barnes it is a particularly worrying situation.
The Barnes Community Association, which is very anxious about it, has said that there should be some investigation by the Minister into whether it would be possible to arrange a special status for the local community shops. It asks that individual small shops or essential stores serving a local community be accorded the same rights as residential tenants. The suggestion is that the Government should set up a shops rents tribunal to


adjudicate on rent increases now that the business freeze has been lifted. The local authorities are asked to adopt a number of special policies to preserve the community trades, including compulsory purchase of any shops left empty for more than six months and planning permission for changing any type of shop. That request is put forward by the Barnes Community Association in its newsletter called "Prospect".
I do not expect the Minister to reply to this request tonight, but I should like an assurance that he will consider it.
Finally, as I indicated earlier, I must point out that in yet another part of my constituency the Greater London Council seems to have abandoned us again. The only possible hope for my constituents is to appeal to the Minister for his assistance. The Greater London Council, as in Kew, seems interested only in using the ratepayers' money to buy property, which it is doing over a fairly wide area throughout Barnes. It is doing it in other areas of my constituency too.
Our last hope lies with the Minister's Department. It cherishes Richmond Park, and all of us in Richmond are grateful to the Minister and his Department for the way in which they look after the park and open spaces. They have safeguarded the area not only for Richmond but for the country as a whole, and we are grateful for the way in which they do it. Will the Minister also cherish Barnes and give us some hope that the village of Barnes will also continue in the next century as it has done during past centuries?

3.35 a.m.

The Under-Secretary of State for the Environment (Mr. Neil Carmichael): The hon Member for Richmond, Surrey (Sir A. Royle) recalled that last November we faced one another in a debate about the environment in Kew, and I congratulate him on securing yet another opportunity to raise the important issue of environmental nuisance being suffered by his constituents, this time principally in Barnes.
I recollect that on the earlier occasion the hon. Gentleman mentioned Barnes as being as badly affected by traffic as Kew. He described vividly the environmental

pressure under which the residents of an urban community live, but he will appreciate that similar and perhaps worse situations exist in many other parts of the country where there is a conflict between the needs of a primarily residential locality and the requirements of a larger geographical area which values its mobility. The House knows very well that there are no quick and easy solutions for remedying this situation.
Perhaps I may make a few comments about Barnes, an area which I happen to know reasonably well. I have lived there for short periods, and travelled around it. I can testify to its being a pleasant area.
To understand something of the environment of Barnes one must appreciate its setting in the London borough of Richmond-upon-Thames. Barnes lies south of one of the many loops in the river, a loop which is approximately one-and-a-half miles across, and north of the Upper Richmond Road, which forms part of the South Circular Road. I think the House will be interested to know that Barnes is mentioned in the Domesday Book. It was called Berne in those days. It was once held as a manor by the canons of St. Paul's and, as the hon. Gentleman said appropriately enough, it now contains the new St. Paul's School.
The area comprises mainly residential development, open space and Metropolitan Water Board land. The residential land to the west is separated from the river by the water board land and Lonsdale Road. The area as a whole affords a quite rural retreat in a splendid riverside position and has special significance in view of its proximity to the densely populated areas of inner London. As the hon. Gentleman said, it involves a journey of about 15 minutes at this time of the night to get to Barnes from Westminster, but I have taken considerably longer on occasion.
The hon. Gentleman complained that the area is suffering severely from the effects of traffic congestion caused by what he terms "juggernauts" and from noise caused by helicopters. He also referred to an application by the London borough of Richmond-upon-Thames for public open space grant in respect of land in Lonsdale Road, Barnes. It may be helpful if I deal with each of these points in turn.
With regard to the question of road congestion, my Department is, of course, acutely aware of the problems caused by heavy goods vehicles using unsuitable roads. Indeed, we have set in hand a programme of research to learn more about the implications of various possible alternative approaches to the problems of movement of goods in towns and the location of traffic generators such as warehouses, shopping centres and haulage yards. I understand that within Barnes, the use of heavy vehicles is generated by the brewery at Mortlake and to a lesser extent by Harrods' depository at the northernmost extremity. No doubt a proportion of the vehicles going to and from the brewery uses the A3003, a part of which is formed by Barnes High Street, but I am not sure whether the term "juggernaut" is used in reference to these vehicles. However, the hon. Gentleman—

Sir Anthony Royle: I am not referring to those vehicles at all. Those vehicles have for many years used the area. There is no complaint about that. It is the vehicles using Barnes as a through route and a short cut which are worrying people.

Mr. Carmichael: I just felt that I had to eliminate those vehicles, because brewery vehicles can be fairly heavy.
The hon. Gentleman must realise—and this is the real problem—that until we get suitable roads there can be no question of moving vehicles from some of the roads they are using. That would merely mean that some other hon. Member would be raising the matter on another occasion to get the traffic moved from his area. I do not say that the hon. Member has no right to raise this, but there are steps which the Dykes Act, as it has become known, may make us all think about—about new roads and other suggestions about the breaking up of loads. We are not sure whether three lorries of 10 tons are better than one of 30 tons.
I must make clear that the responsibility for main roads in Barnes, including the A3003, the A306 and the South Circular Road, lies with the Greater London Council and that the Richmond Borough Council is responsible for all other roads in the area. There are no

trunk or special roads in this part of London south of the Thames for which my right hon. Friend the Secretary of State is responsible. The responsibility for placing restrictions, if such are necessary, on lorry traffic lies, therefore, with the Greater London Council, and no doubt the hon. Member has made his views known to that authority.
The GLC has already produced a consultation document containing tentative proposals for lorry routing in London and has sent copies to the London borough councils and other interested bodies, including my own Department. In so doing the council is recognising the importance of planning for the use of the lorry in the knowledge that there is no alternative system of distributing goods immediately available. A positive lorry routing system draws attention to existing problems, and for this reason the council is seeking the views of London boroughs, industry and other interested parties before taking up any firm decisions. The A205 South Circular road on the southern fringe of Barnes is shown on the tentative network. There is no alternative road available.
The GLC has itself done a lot of work over the whole field of freight distribution, and I understand that it is hoping to publish a discussion document in April. There will be a period of up to four months of public consultation before any decision is taken about an overall strategy.
I hope that, having said that, I have made clear to the hon. Member that things are being done and that there is hope that some part of the solution will be found soon.
Because of the shortness of time, I turn briefly to the problem of noise from helicopters. The course of the river is for safety reasons the designated path taken by helicopters travelling between the heliport at Battersea, about three miles to the east, and London Heathrow Airport. I know that during the previous debate on the environment in Kew the hon. Gentleman expressed, in passing, his disquiet about noise from aircraft and helicopters on their way to Heathrow. The GLC has now received an application for planning permission to continue the use of the site at Battersea until an


alternative site can be found and to increase the number of permitted flights from the present 4,000 per year to 6,000 per year. The hon. Gentleman will appreciate that the matter is primarily one for the Greater London Council, at least in the first instance.
The GLC is concerned about the problem, and I would draw the hon. Member's attention to the council's action in conducting noise surveys along the route followed by the helicopters. The analysis of these surveys is expected to be completed by the end of April and a report will be presented to the planning committee in early May.

Sir Anthony Royle: When the Minister says that this matter is the responsibility of the GLC in the first instance, does that mean that the Secretary of State can then overrule whatever the GLC may decide?

Mr. Carmichael: It would depend upon whether there were appeals after the GLC had made its decision. On many of these aspects I would need guidance on the actual powers that my right hon. Friend had. But, obviously, if there were appeals—I should need guidance on this—I would think that it would be my right hon. Friend to whom appeals would be made.
The hon. Member also referred to Richmond Borough Council's application—I am sorry to be speaking so rapidly but I am sure the hon. Gentleman would like some note of these points—for public open space grant for land in Lonsdale Road, Barnes. Perhaps I should explain a little about this grant. Until 1st April 1974 grants were payable towards the cost of acquiring land for use as open space. These have now been discontinued. Public open space consists of parks and pleasure grounds, recreation grounds and playing fields which are in or near built-up areas and are provided by the authority primarily for the use of residents in the area.
Grant could be claimed by all local authorities including parish councils, in respect of expenditure incurred with the acquisition or appropriation of land for use as open space. The grant was payable at the rate of 50 per cent. of the cost of acquisition. Land appropriated for use

as public open space was also eligible for grant. Treasury agreement was necessary for any land being approved for grant purposes in excess of £50,000.
As the hon. Gentleman said, in 1973 Richmond Borough Council appropriated for open space purposes some 17·3 acres of land in Lonsdale Road, Barnes, which formed part of the site of the former Metropolitan Water Board reservoirs. Following local representation, the council decided to prepare a scheme for infilling the reservoir and the laying out of the area as public open space. In March 1974 Richmond applied for public open space grant for this site. The open market value was £800,000, and grant would have amounted to £400,000.
The hon. Gentleman said that he was aware that there is a shortage of money. But, more important, he will be aware that there is no deficiency of public open space in Richmond. Indeed, the borough has more public open space per 1,000 of the population than any other of the 33 boroughs in Greater London. It is interesting to note that, in all, over one-third of its 14,000 acres comprises public open space.

Sir Anthony Royle: That is not the point.

Mr. Carmichael: No, but there is a question of money, and many towns outside London are nowhere near so favoured. I have received delegations from various parts of the country who are looking for just a very little open space.
But to return to the specific point, in June 1974 the Department turned down the council's application for grant on the ground that the degree of additional public benefit which would be derived from the proposal did not justify an allocation of funds of this magnitude. Moreover, the site is already used by the public for nature study and bird watching. I need hardly add that in the present economic climate it would now be even more difficult to justify such expenditure of public money.
To sum up, both the question of traffic and helicopter nuisance are, as I have explained, primarily the responsibility of either the Greater London Council or the council of the London borough of Richmond-upon-Thames. As the hon. Gentleman will know, an


important aspect in the relationship between central and local government is that the respective areas of responsibility should be kept as clear as possible, and that accordingly it is not the policy for central Government to intervene in the exercise of a local authority's responsibilities and thereby weaken its independence, unless there is incontrovertible evidence that the authority is failing in its duties.
My last point may take only a moment. The question of the small shops closing because of changes in—

The Question having been proposed after Ten o'clock on Wednesday evening, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at ten minutes to Four o'clock a.m.